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• In 1984, KPC's comptroller (later president) Martin Pihl claimed that if the Forest Service 

 didn't reduce the price of timber and allow larger clcarcuts, "we're all going to pacic up and 

 leave." (Juneau Empire, March 29, 1984). 



• In 1992, EPA proposed much tighter pollution controls for KPCs pulp mill. KPC's 

 President, Martin Pihl, claimed that the new pollution controls "would seriously threaten the 

 survival of the mill, or any pulp mill anywhere." (Ketchikan Daily News, April 17, 1992). 



• In early summer of 1993, KFC announced that it would shut down its pulp mill "in August 

 for three months because it was running out of wood for pulp." (Ketchikan Daily News, 

 August 6, 1993). However, KPC "delayed the temporary shutdown of its pulp mill until the 

 week of Sept. 15 and says it will last just 30 days ... [because of the mill's] aggressive 

 logging plan, along with purchases of pulp logs and chips throughout Southeast Alaska and 

 Canada." (Sitka Sentinel, August 5, 1993). 



• On June 26, 1995, the Ketchikan Daily News announced that KPC "says it will close its 

 Ward Cove sawmill for an indefinite period starting Friday because it is running out of 

 timber sold by the U.S. Forest Service." The same day it announced the closure of the 

 sawmill, the Ketchikan Daily News contained a paid add by KPC, which offered to sell 

 "approximately 3,000 board feet of red cedar and 2,000 board feet of Alaska yellow cedar 

 during the third quarter of 1995." In fact, the decision to close the sawmill was a business 

 decision driven by pulp prices that had more than doubled since 1994. and were then at or 

 near their highest price ever . While pulp prices were exploding, the average market price for 

 sawn timber dropped by 33 percent. 



• On March 12, 1996, iheKetchikan Daily News reported that KPC would close its sawmills in 

 Ketchikan and Metlakatia from late March until after Memorial Day because of "a shortage 

 of timber." KPC's problem is not timber supply, but the cyclical, and recently volatile, 

 nature of the international pulp market . In the same article, the Ketchikan Area Forest 

 Supervisor expressed his personal opinion "that the current shutdown has more to do with 

 market conditions than supply of logs ...." These shutdowns occurred despite KPC having 

 access to 209 million board feet of Tongass timber as of March 24, 1996 — well over a year's 

 supply " including roughly 87 million board feet that required no new roading. KPCs 

 problem is that its monopoly contract has shielded it from competition for so long that now it 

 has trouble competing with modem, lower-cost competitors on the international pulp market . 



KPC has a long history of "crying wolf with closure threats every time their logging operations 

 are questioned. KPC has further threatened to pack up and leave unless EPA waived pulp mill 

 pollution requirements or relaxed enforcement of water quality regulations. 



KPC does not deserve any special treatment from Congress because it has repeatedly failed 

 to act as a responsible corporate citizen. Any "extension" of KPC's monopoly would 

 continue the environmental and economic problems caused by this exclusive, 50-year 

 contract, and become one of the biggest heists of public resources since the days of the 

 railroad robber barons. 



SEACC 05/27/96 



