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State of the Industry, 2006

CALIFORNIA FOREST PRODUCTS COMMISSION RELEASES

THIRD ANNUAL "STATE OF THE INDUSTRY" REPORT

Production in Forests in California Increases By 1.1 Percent;

Upturn in Thinning On Government Lands

Harvesting of trees in forests in California increased by 1.1 percent in 2005 as efforts to thin overcrowded government-owned forests accelerated, the California Forest Products Commission said today in its third annual State of the Industry report.

While harvesting on government-owned forests increased, the overall harvesting in those forests remains at just 17 percent of what it was in 1990. The trend of diminishing harvests over the past decade and a half has helped result in California importing more than 70 percent of the wood used by Californians and a buildup of flammable forest conditions.

Commission President Donn Zea said those who purchase California-grown wood get a truly "green" product.

"California-grown wood offers an excellent choice for consumers, particularly those interested in using green building products," said Mr. Zea. "California-grown wood meets the most stringent environmental regulations, is a renewable resource and plays a key role in absorbing harmful gases that can contribute to global warming."

"In contrast, other building materials like steel and concrete are not renewable and require significant amounts of fossil fuels to be produced," Mr. Zea said.

While steel and concrete are non-renewable, forests are constantly regenerating. In California alone, forests grow an estimated 6 billion to 7 billion board feet every year - with less than a third of the new growth harvested. While excess growth in public forests can increase fuels for catastrophic wildfire, forestry companies plant millions of seedlings every year in accordance with long-term sustainability plans to ensure future forests and wood supplies.

According to statistics complied by the California Board of Equalization, a total of 1.72 billion board feet of wood was harvested in 2005, up from 1.7 billion board feet of wood in 2004. The total value of the harvested logs was $547 million, up from $500 million in 2004. The Commission noted the wood harvested in 2005 was enough to build nearly 115,000 homes.

Of the total harvested, about 230 million board feet of wood was harvested on government-owned lands.

As recently as the late 1970s, private forestry companies were able to produce as much wood as Californians consumed. For most of the 1990s, federal policies and court challenges discouraged harvesting on government-owned land. The cost and restrictions of increased regulations also spurred declines in harvesting on private lands.

"While some of these policies were purported to benefit the forests and the environment, in fact they have led to overcrowded forests on government-owned land that are more susceptible to catastrophic wildfire and killer insect infestations," Mr. Zea said. "An unintended consequence of these policies is that we've dramatically increased wood imports from places with less protection for forests and the environment."

On privately owned lands, two recent studies by Cal Poly-San Luis Obispo show that California's regulations" intended to protect the environment" are instead pushing privately owned forestland toward development. A California Department of Forestry and Fire Protection report also indicates that regulations and economic pressures are contributing to increased conversion of forestland to non-forest uses.

"California forestry companies practice sustainable forestry that ensures forests for future generations," Mr. Zea said. "Californians needs to support policies that encourage investment in forestry infrastructure and conservation of the forest resources with which we have been entrusted.

California is a world leader in sustainable forestry, and forestry companies must continue to harvest and plant trees to provide a valuable, renewable resource and meet the consumer needs right here in our state.

For the Board of Equalization harvesting data, please visit:

http://www.boe.ca.gov/proptaxes/pdf/harvyr2.pdf