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Logging in southeast Alaska means cutting the remaining 

 coastal old-growth rain forest. Official Forest Service 

 statements notwithstanding, managed tree farming is simply not a 

 viable option. 



The only real economic questions facing Forest Service 

 timber managers are: How much, if any of the remaining old- 

 growth forest should be mined? And, at what rate should timber 

 mining occur? 



The long-term sustained yield calculations by the Forest 

 Service to support future timber rotations should be seen for 

 what they are: rationalizations for federal government spending 

 to expand the Forest Service's timber program budget and to 

 subsidize the pulp companies in southeast Alaska. 



Given the scarcity of temperate zone rain forests, their 

 potential scientific and economic value as an undisturbed 

 ecosystem, and their importance to fishing and tourism jobs and 

 traditional ways of life in southeast Alaska, it would be 

 reasonable to expect very little logging on the Tongass. 

 Instead, public policy perpetuates an obsolete notion — high 

 levels of logging on the Tongass to support a pulp industry. 



Pulp Companies and Market Structxire 



The Forest Service's long-standing effort to establish a 

 major wood product's industry in southeast Alaska did not bear 

 fruit until the 1950s, when it was able to induce two companies 

 to build pulp mills in Ketchikan and Sitka. The mills came only 

 after the Forest Service created exclusive "working circles" from 

 which each company was guaranteed timber supplies under 

 exceptionally attractive pricing and operating provisions. The 

 first of the 50-year contracts , now held by the Louisiana Pacific 

 Corporation, obligates 8.3 billion board feet of timber and 

 expires in 2004. A second 50-year contract, now held by the 

 Alaska Pulp Corporation, obligates 5.0 billion board feet and 

 expires in 2011. These contracts are unique to the national 

 forests. No other such long-term agreements exist. 



As a result, the two large pulp companies holding the 50- 

 year contracts dominate the market. Today, Alaska Pulp and 

 Louisiana Pacific control between them 100 percent of the 

 region's pulp mill capacity, and two-thirds of the sawmill 

 capacity. 



Mill capacity is only one indication of the dominant market 

 position held by Louisiana Pacific and Alaska Pulp. Because the 

 profitability of timtoer operations can be increased by finding a 

 market for both pulp logs and sawlogs, the independent sawmills 



