SOS Forests

Not a Conspiracy-A Business Plan

by Bear Bait

The Land and Water Conservation Fund. The money to buy land from willing sellers to provide for resource, water, air and ecosystem conservation. And it comes from taxes on motor boat fuel, Federal surplus land sales, and offshore oil and gas fees and royalties. The slush fund for NGO preservation. They buy a piece of ground, and the Govt gives them twice what they paid for it. Back door tacit funding by Big Govt for Big NGOs.

Softwood lumber and timber is in worldwide surplus. Pinchot would be proud of his efforts at forestry education, and those who followed his lead. Great reforestation and aforestation efforts, worldwide, have grown the softwood timber supply in a mathematical progression to where that resource is a glut on the market.

However, it is a young forest, worldwide, with post WWII forest repairs in Europe and Asia, and international land management providing species travel worldwide. The long cutover ponderosa pine of the new West is now produced in Chile and Argentina, Douglas-fir is grown in New Zealand, Ireland, England, France; the list is long.

My friend who imported pine from South America to serve the US market now sells the very same wood, all of it, to China. And he is not sure how long that market can last. The East Coast of the US gets wide dimension softwood from Europe for home construction, cheaper than they can get it from the West Coast.

To use the new forest, at the earliest possible entry, the whole of home building was changed to use engineered wood products in lumber, truss, beam, and panel constructs. Your grandparents house in no way resembles today’s methods, quality of materials, or durability. But neither do your shoes. Large logs are still cut in a handful of mills to make special products for historical reconstruction, remodeling, and export. There is only a vestigial milling capacity and market for those products. It is a small log economy we now live in now, and wood fiber is the one commodity the world is over-supplied with, other than human beings.

You add the capital gains tax schedule to growing trees, the glut of trees going to market, the 18 billion board foot decrease in demand in the US in the last 24 months, and there are problems in Megapulp City. The future is bleaker than bleak, and expansive CEO remuneration is at stake. Time for a new game plan. Oh, and millions and millions of Interior Canadian trees dying each year to insect infestation, all in need of salvage or incineration, in a world adverse to smoke and not in need of additional lumber supplies. Bleak just got bleaker.

Hence, you have all the vast land holdings of the MegaPulps transitioning into REITs and TIMOs, which are essentially an investment pig in a poke if the truth about markets and demand ever gets out. I see the amenity lands, the high dollar lands, going first and fast, before regulation at state level can catch up with them. What is left, then, will be ice and snow, high elevation, slow grow, public land adjacent, and that is when the Megapulps will lean on their under-that-table well-financed fellow travelers of the NGOs to husband their brother Megapulp’s journey from private ownership to some sort of transfer to public ownership, replete with lots of money, land trades for more amenity lands, and the abandonment of private industrial timberland economies to public ownership.

That is one of those deals where someone says they broke even. Nobody breaks even. They made a little, or they lost a little. In this deal, it is not having the private estate participating in the public process of producing tax revenues to run social service agendas and military excursions, and the purchase of more holding costs, more management cost, from a lesser tax base. One of those deals where you lose a $billion on the plus side of the bottom line and add that amount, and more, to the negative side of the bottom line for land holding expenses. The cost to the economy will the sum you get when adding the two together. A bad, bad deal.

So that is what I see coming. It will take a while. Maybe it will take 15 to 20 years. There will be the REIT and TIMO years, the disappointment at returns, the public being asked to augment the pension losses to the public sector beneficiaries, and then the lands being bought using the Land and Water Conservation Fund. The Megapulps will get to sell the land at least two or three times, and then get their final payout from the Feds when they turn it all over to them, paid for by us at the fuel tank, from the “gains” the Feds got when selling land to the Megapulps in the exchanges for more amenity land, and the tax on motor boat fuel.

I might not call that a conspiracy as much as I would call it a business plan. One that only the privileged few get to see in the groves of the Bohemian Club, at Gstaad, and other places where our fates are decided by the deciders, and the Deciders-in-Chief.