Hardwood Federation December 2018 Newsletter
From the Executive Director: The Farm Bill is a Holiday Gift We Can All Enjoy The second week of December was a big one for the wood products industry. The U.S. Senate and House both voted in favor of the conference report for the Agriculture Improvement Act (H.R. 2)-otherwise known as the Farm Bill. The Senate acted first, passing the measure with a veto proof margin of 87-13. The House followed suit on December 12, with a record vote of 369 - 47. Fun fact: the previous record high House vote in the House for a Farm Bill was 319! The legislation now heads to the President's desk for final approval, which he is expected to sign on Thursday December 20th at 2:30 PM just after our newsletter publication. Based on our review of the 800 plus page document it appears that we prevailed on all of our key Farm Bill advocacy priorities.
On trade, both the Market Access and Foreign Market Development Programs (MAP and FMD) are reauthorized and fully funded at $200 million and $34.5 million, respectively. The conference report takes the Senate's approach in repackaging the programs in a fashion where they will continue to operate as they have, but will be protected from arbitrary funding reductions that had threatened to eliminate the FMD program in particular. This is a big win for our sector and has been a primary focus of our advocacy for the last two years. A big thanks to all of you who participated in our fly-ins and weighed in with your Members of Congress about the importance of these trade provisions and their importance in opening up markets overseas for our products.
The conference report also includes the Senate's version of the Timber Innovation Act, a measure that promotes use of wood in taller buildings-higher than 6 stories. The provisions in the measure include both the research and development components of TIA as well as the wood innovation grants piece. Again, we have been advocating the stronger Senate version to prevail in conference negotiations and are pleased to see this outcome.
We are also very pleased to see that the conference committee accepted the House's version of the Community Wood Energy and Wood Innovation Program (CWEIP). This program is authorized to receive $125 million over the life of this Farm Bill to facilitate installations of heat and power systems that operate on sawmill residual-derived fuels. This represents a 5-fold increase over funding in the current Farm Bill for this program. This effort has been a focus of Hardwood Federation advocacy as a potential solution to our sector's residuals issue. Also, of note is the fact that the scope of the program has been broadened as well, such that capital improvements to sawmills would also be eligible for funding under CWEIP. This represents a double win for the hardwood sector.
Finally, on federal forest management, the conference report includes a few provisions that are beneficial, but not to the extent that we had been advocating. The report expands Good Neighbor Authority to allow Indian tribes and counties to participate in the program. The report also includes an additional categorical exclusion (CE) for greater sage grouse and mule deer habitat. Finally, there are some landscape scale forest restoration provisions that made it into the package. Specifically, the conference report establishes a competitive grant program for financial and technical assistance to encourage collaborative, science-based restoration of priority forest landscapes. In addition, the bill seeks to promote wildfire mitigation across federal forestland boundaries by providing the Forest Service with additional authority to address the threat of wildfire and promote restoration of Federal and non-Federal land. Also of note in the bill is authorization of an annual report requiring the Secretaries of Agriculture and the Interior to submit to Congress a report regarding the number of acres treated for wildfire, insect infestation, or disease prevention; the number of acres categorized as high risk, total timber production, average fire intensity of wildfires and federal response time for each fire greater than 25,000 acres.
We must acknowledge the great effort so many of you have made towards moving this bill across the finish line. This has been a key issue at the Hardwood Federation Fly-in over the past several years and our consistent message regarding the importance of the above programs has resonated and made a difference. Letters, phone calls and personal meetings have also made a difference. Thank you for all your hard work in helping to make this happen.
The Hardwood Federation team wishes you, your family and your employees a happy, healthy and peaceful holiday season!Issues
China Trade
Following much speculation after the publicized halt to increased tariffs after the meeting between President Trump and Chinese President XI on December 1st at the G20 gathering in Argentina, the United States has formally notified China that it will trigger an increase in tariffs on billions in Chinese goods on March 2, after the 90-day trade ceasefire wraps up.
A notice published in the Federal Register confirms there won't be any wiggle room on the deadline before tariffs on more than $200 billion worth of Chinese goods ramp up from 10 percent to 25 percent. U.S. Trade Representative Robert Lighthizer described the 90-day period, which ends March 2, as a "hard deadline."
There were several indications late last week that the trade war ceasefire is returning commerce between the two nations, at least temporarily:Beijing has resumed purchases of U.S. soybeans and agreed to buy more energy products. Records show China purchased 300,000 metric tons of U.S. soybeans, close on the heels of its 1.13 million metric ton purchase earlier in the week.The Chinese government announced it would be lowering its tariff on U.S. autos imports from 40 percent to 15 percent. That is the same level it imposes against every other country. That reduction is only for three months, however, beginning on Jan. 1 - reflecting the uncertain prospects for the two countries to reach a long-term deal.
However, it remains somewhat unclear what China is expected to do by March 2 to avoid the higher duties. The heart of the U.S.' complaints against Beijing's trade practices focus on deeper issues like Chinese technology transfers and intellectual property policies.
Federal Forests
Expanded timber cutting will go into effect in West Virginia's Monongahela National Forest in FY2019. This will be the first of six planned timber cuts and will begin in Webster country with 5.4 million board feet of oak, poplar, basswood and black cherry being felled. In total the 6 sales will total 15.8 million board feet. It is expected that within 5 years timber harvesting in the Mon - as it is known to locals - will more than double under the new implementation of US Forest Service landscape-scale restoration and improvement projects.
https://www.wvgazettemail.com/news/mon-forest-to-double-timber-cut-in-next-five-years/article_faec9399-7db3-54d5-b246-94147843429c.html?utm_medium=social&utm_source=email&utm_campaign=user-share
Waters of the U.S.
Last week, the Environmental Protection Agency unveiled a proposed rule that is intended to replace the Obama Administration's Waters of the U.S. regulation. WOTUS, as it is known, has long been the subject of fierce debate. The Obama Administration's WOTUS rule took an expansive view of the types of waters covered by the federal Clean Water Act. It not only included traditional navigable water ways, but any water feature that had a direct or indirect nexus to a navigable water body. The regulated community's concern with this approach is the potential for virtually any activity conducted near a "Water of the U.S." to trigger federal Clean Water Act permitting obligations, even activities near areas over which water flows temporarily throughout the year. As such, the rule became a major concern for forest landowners and the larger agriculture community. Earlier this year, EPA suspended the Obama WOTUS rule. The proposal unveiled last week as its replacement takes a much narrower approach to defining WOTUS. The proposal has been met with somewhat mixed reviews so far. Environmental advocates have characterized the proposal as a major roll back of water quality protections for our nation's wetlands and streams. On the flip side, some agriculture groups are asserting that the new WOTUS proposal is not explicit enough and leaves too much room for regulatory interpretation. That being said, the proposal does exempt most ephemeral streams-those with water flow only briefly after rain events-which should address most if not all forestry-related concerns.
Once the proposal is published in the Federal Register, it will be subject to a 60 day public comment period.
Tall Wood Buildings
Per a release from the American Wood Council (AWC) word came across on Dec. 19th that all 14 code changes permitting tall mass timber construction up to 18 stories have been approved for inclusion in the 2021 International Building Code (IBC). ICC reported the results from their online vote, confirming the outcomes from the Richmond, VA hearings for each proposal. Notably, each outcome is what the industry sought going into the Richmond hearings.
The next step is implementation and adoption of the 2021 ICC Code at the state level. This will take place over a number of years, with some states taking the initiative on early adoption - like Washington and Oregon. Some states adopt administratively and some must be voted on in the legislature. This is an important step forward regarding Cross-Laminated Timber (CLT), and similar technologies, and critical to a future where hardwood can be used in construction of buildings up to 18 stories.Contribute to HFPAC
Contribute to HFPAC!!!
The holidays are upon us and 2018 is coming to an end, but there is still time to contribute to the PAC and help us reach our year end goal. With all of the recent retirement announcements and the roller coaster to come this year it is more important than ever that HFPAC remains strong, viable, and supporting the hard work of the Hardwood Federation and the hardwood industry. We Need Your Support so Consider Contributing Today!!!
As a reminder there is a difference between Hardwood Federation and Hardwood Federation PAC fundraising. Any individual and any company may give as much as they want at any time to the Hardwood Federation. These funds are used for operations, salaries, day to day expenses, and anything else that is not PAC related. They are also 82% tax deductible.
On the other hand, contributions to HFPAC must be from individuals only, up to $5,000 per year, and can only be used for PAC related expenses. HFPAC, while managed by HF, belongs to the industry. It is designed to strengthen elected officials' understanding of the hardwood industry and advocate on the industry's behalf in Washington. The PAC is bi-partisan, working with those of both political parties and sends a powerful message to our elected officials telling them we are a serious and engaged industry.
If you participated in HFPAC in 2017 we continue to extend our deepest thanks and hope you will continue giving again this year and even jump up your participation level if you are able. If you missed out on giving last year, now is the best time to get involved.
For more information, please visit the HFPAC website and fill out a Prior Approval Form so that we may contact you directly on our efforts. Or, to get involved in the Hardwood Federation PAC please contact Cary Moon (202-463-5186 or cary.moon@hardwoodfederation.com) for more information.Happening in the Hardwood World
Meeting with the Chief
On December 18, Hardwood Federation Executive Director Dana Lee Cole met with Vicki Christiansen, the relatively new Chief of the U.S. Forest Service. In sum, the meeting was a productive introduction in which the Chief very clearly articulated her leadership vision for the organization and Dana discussed the Federation's issue priorities, particularly in the area of federal forest management. Ms. Christiansen noted that timber output on federal lands has increased considerably in the last year and that increased board foot production will continue to be a focus. But she noted that her broader objective is to drive a culture change within the organization to be more focused on service-since "service" is embedded in the name of the organization she leads-and more on innovation and risk taking at all levels within the USFS. This was encouraging to hear. Chief Christiansen boasts decades of service within the USFS and appears to have a firm grasp on how the Service needs to change to the Service's mission going forward. We look forward to working with her to help her succeed.
In the discussion, Dana noted that the Hardwood Federation had pushed hard during the Farm Bill reauthorization effort to include additional tools for the Forest Service to expedite thinning projects and other needed work on federal forestlands. She went on to note that Congressional offices that remained opposed to granting new authorities in this area asserted that the USFS had not begun to use the new tools it was afforded in the omnibus budget deal forged back in March. Chief Christiansen acknowledged that implementing new categorical exclusions, for example, does take time but that staff was on an accelerated pace to merge these new tools into project decision making and will continue to do so.
In short, the Chief appreciated our outreach and our offer to serve as a resource to her and her team going forward
Paving with Wood
Most people don't usually think of wood when it comes to paving parking lots...but maybe they should. In Greenville, SC a study is being conducted through the U.S. Endowment for Forestry and Communities (a Greenville based environmental nonprofit), the U.S. Forest Service, Oregon State University and Purdue University to create a concrete made up of cellulosic nanomaterials - which will hopefully produce a material that offsets the exceptionally high carbon dioxide emissions from traditional concrete production. Concrete presently accounts for 5-10% of all human-caused CO2, but scientists are now breaking down wood to its smallest components and creating a product that offsets much of this C02 and also creates a mixture that is up to 15% stronger. To read more click here.
Happiest Holidays from the Hardwood Federation
As always, thank you for your support of the Hardwood Federation and your engagement in the work we do in Washington. But in the holiday spirit, I also want to thank you for the support you provide to your employees, their families, and your local communities.
Warm wishes for a very happy and merry holiday season from the Hardwood Federation!!