The Economics of Forest Fuels Treatments: A Literature Review Rob Titcomb ECON 539 Oregon State University

Introduction 1930’s Forest Service policy of fire suppression Unintended consequences of policy –Overgrown unhealthy forests –Increased risk of forest fires / insects & disease Objective of a Fuels Treatment

Economic problems with fuels treatments Low value of biomass Scarce distant markets Harvesting and Transportation costs –Costs increase when diameter of trees decrease

The Healthy Forest Restoration Act (H.R. 1904) December 2004 Bush signed HFRA into law. Purpose 1 of act : –“to reduce wildfire risk to communities, municipal water supplies, and other at-risk Federal land through a collaborative process of planning, prioritizing, and implementing hazardous fuel reduction projects” (HFRA) Why has HFRA not been used more to treat more acres? Barriers to successful implementation of HFRA –Finding the right methods and tools to conduct forest treatments (Forest Engineering R&D 2005) –Harvesting and Transportation Costs (OFRI biomass study 2006)

Objectives of Literature Review 1.) Identify where knowledge is lacking and make policy recommendations 2.) Examine what efforts have been made to minimize costs 3.) Determine if fuels treatments can pay for themselves

Summary of the Literature Factors affecting economic feasibility of treatments –Type of harvesting system used –Road accessibility –Hauling distance and transportation to markets –Market price of material

Literature Summary (con’t.) Finding markets and purchasers is difficult in rural areas Fuels treatments must be designed to meet the needs of the forest type Value of small diameter trees is low

Analysis of the Literature Knowledge gaps Equipment manufacturing must improve to harvest and handle small material Policy Recommendations Price of Biomass must increase Biomass markets develop and be closer to the forest Hauling distances must decrease / gas prices must go down

Analysis (con’t.) Efforts used to minimize costs Treatments must be individually designed to accommodate site specific needs Can fuels treatments pay for themselves Yes, it has been shown to be possible

Conclusion We are facing a forest health problem coupled with a forest economics problem. –More active mgmt. is needed on the landscape HFRA can be improved through a revision of their statues and provisions to include the economics of fuels treatments –Requires interrelated markets and industries to work together