The recession of 2008 caused Alabama’s forest industry to collapse along with construction and real estate. That may have been a blessing in disguise.
“I tell folks those trees didn’t know there was a recession going on. They just kept growing,” says Ken Muehlendfeld, senior project manager for the Alabama Department of Commerce, who recruits new investment in forest products. “What happened is, the inventory expanded during that period. It’s kind of a compound interest effect.”
Today, both investment and resources are growing, putting the state among the national leaders in timber products. State statistics are eye-opening.
- New forest products annual investment increased from $103 million in 2008 to $1.31 billion in 2018, with about $3.7 billion invested over the last three years.
- Jobs increased by about 3,800 over the last five years, to more than 44,000.
- More than a dozen mills located, opened or expanded lumber capacity from 2016 to 2018.
- Alabama ranks second nationally in pulp production, paper and paperboard. It is third in lumber wood panel production and sixth in wood panel production.
- At 42.2 billion cubic feet, Alabama has its largest timber inventory ever recorded.
“We want to put new manufacturing in locations where there is excess growth. We don’t ever want to put somebody in a location where they’re going to start depleting inventory. We want to have a long-term, sustainable supply of resource,” Muehlendfeld says.
Regionally, a relatively new app has come out that identifies forest resources across the 12 Southeastern states, East Texas and Eastern Oklahoma. It’s called the Southern Timber Supply Analysis and can be accessed without charge at southerntimbersupply.com.
Developed by Texas A&M University and modeled on its app for East Texas forest resources, the app allows searches by type of wood, ratios of growth to removal of timberland, existing facilities within a set radius of a location, and more.
Since the South has about half of the nation’s total timber resources, the app
is expected to help businesses and other interests do basic research on what’s avail- able, says Barry New, head of the technical development branch of the North Carolina Forest Service. He also chairs a committee of the Southern Group of State Foresters that was involved in the tool’s development.
The app can create a large variety of maps and overlay specific items, such as available facilities, that the user wants to study.
“The main feature is that you can select a spot on the map and draw a circle — a 50-, 75-, 100-mile radius, or a specified trucking distance — and find out about the resources within that woodshed,” New says. “It has applications for a lot of uses.”
Strengths of the app include accessibility and anonymity. A potential developer may not be ready to disclose interest to state officials, for example.
Dan Chappell, forestry inventory analyst and marketing director for the Alabama Forestry Commission, says the app is potentially a good starting point and could also attract young people interested in forestry.
“It’s amazing how fast you can get an attractive looking outlook report put together,” he says. “It’s really impressive how well it works and how quickly it works.”
But Alabama forestry officials say their data is more up to date and detailed than what is available through the Southern Timber Supply Analysis.
“Every county in the state has some kind of timber operation in it,” says Rick Oates, state forester for Alabama. Rural counties, such as Wilcox, Marengo, Clarke, Washington and Monroe, have a concentration of logging operations, but Mobile and Baldwin counties also have resources, located generally north of Interstate 10. Overall, some 23 million acres are devoted to timber, and 93 percent of the acreage is privately owned.
The Forestry Commission is happy to offer detailed individual reports upon request, Oates says. “We’ll ask you all kinds of questions about what you’re looking for, what kind of wood, what your area is.” The goal is to match up investors with available land while maintaining sustainability.
Muehlendfeld represents the commerce department in discussions about availability and potential economic incentives, essentially acting as the matchmaker. The commerce secretary ultimately recommends an incentive package to the governor, who makes the final decision. Local governments also may be part of those incentive packages.
While the recession may have inadvertently created a surplus, officials cite a number of other factors for Alabama’s more recent successes.
One reason is severe damage to forests in the northwest U.S. and western Canada from the mountain pine beetle, as well as a 500-year drought. Chappell says the damage is visible in a state like Montana, and once a pine tree is infested, it can’t be used and must be cut down.
The pine beetles that affect Alabama haven’t done that kind of damage. The Forestry Commission employs pilots who regularly fly over forests to pinpoint areas of dead or dying trees. The state then asks the landowners to quarantine those tracts and cut the trees down.
Western Canadian forests also have been depleted by government policies intended to keep people working in the timber industry but also dumped a glut of timber on the market, Chappell says. “They would cut and process to their hearts’ content, whether it made economic sense or not, and sell that wood at an economic loss to the United States. It was difficult for mills on this side to compete with businesses that weren’t really attuned to making a profit. That was tough.”
All that made the Southern U.S. more attractive, and Alabama was ready with trees.
“I think you’re seeing a shift to the Southeast from Canadian mills,” says Gary Faulkner, economic development coordinator for the Alabama Forestry Commission. “Our economy has done well, so our forest product industry has done well. We’ve done well because we have great surplus in our forest resources.”
In Alabama, trees simply grow faster than they do in Canada, Chappell says. Alabama forests generally can be placed on 35-year rotation from seeding to cutting, whereas in British Columbia the process takes 100 years.
People who live in or near cities may worry when they see developers clear-cutting trees for subdivisions, Chappell says, but rural areas are also changing. “What people don’t see is farmland just let go. Trees seed back in and take over. Or pasture where they don’t run cattle anymore and it’s not really tended to. It passes from what we call a non-forest use and it reverts back to the forest.”
Oates suggests that a new generation of landowners is inheriting property and paying attention to best management practices that protect their investments in timber resources.
“Timber and hunting and wildlife re- ally go hand in hand,” Oates says. “A lot of times what’s good for forest management is very good for providing food and habitat for deer and turkeys and other animals. But more and more we’re seeing a change in the reason people are owning land. A lot more people are owning it nowadays for recreation versus strictly timber management.”
Whatever the reasons, Alabama’s forestry industry is in great shape for further growth trees, jobs and dollars.
Says Faulkner, “We have a tremendous amount of resource. We have infra- structure and transportation. We have the workforce and we have the business climate to facilitate those parameters to make a good business case.”
EMERGING: ALABAMA FOREST AS BIOFUEL
The international market for Alabama wood pellets continues to expand as Japan, South Korea and European countries seek to reduce carbon emissions.
“Those countries are trying to use renewable energy sources. They don’t have domestic resources to do that, so they’ve been buying pellets from the U.S. and Canada and other places as well,” says Ken Muehlendfeld, a senior project manager in the state’s Commerce Department.
The United Kingdom has been the biggest customer for Alabama wood pellets.
The processed pellets look like rabbit feed and are burned in place of coal to produce energy, Muehlendfeld says. They are made from shavings, sawdust and small-diameter trees that are chipped. Those wood products are of relatively low value in the U.S.
The mixture is dried and ground, then compressed into the finished product. At overseas power plants, the pellets are pulverized and blown into furnaces.
Two new pellet plants in Alabama were announced in the closing months of 2019.
In October, Maryland-based biofuels company Enviva said it would build a $175 million wood pellet production plant in Sumter County. The plant will be at the Port of Epes on the Tennessee-Tombigbee Waterway. Construction is expected to begin in early 2020, and the plant is expected to create 85 direct jobs.
In December, Tuscaloosa-based Westervelt Co. announced plans to partner with Canadian Pinnacle Renewable Energy on a $99 million pellet plant in Demopolis on the Tombigbee River. The Demopolis plant is slated to open in 2021.
Zilkha Biomass Energy began producing pellets in Selma in 2015, but the mill was idled in 2017. After a $59 million restructuring of the firm in 2018, production began again in 2019.
Jane Nicholes is a freelance contributor to Business Alabama. She is based in Daphne.