Statement: Assessing the Cumulative Impact of Regulation on U.S. Manufacturers
Statement of David P. Tenny
President and CEO, National Alliance of Forest Owners
House Committee on Oversight and Government Reform, Subcommittee on Regulatory Affairs
“Assessing the Cumulative Impact of Regulation on U.S. Manufacturers.”
March 9, 2011
I. Introduction
The National Alliance of Forest Owners (NAFO) is pleased to submit a statement to the House Committee on Oversight and Government Reform, Subcommittee on Regulatory Affairs’ hearing on, “Assessing the Cumulative Impact of Regulation on U.S. Manufacturers.”
NAFO is an organization of private forest owners committed to promoting Federal policies that protect the economic and environmental values of privately-owned forests at the national level. NAFO membership encompasses more than 79 million acres of private forestland in 47 states. NAFO was incorporated in March 2008 and has been working aggressively since to sustain the ecological, economic, and social values of forests and to assure an abundance of healthy and productive forest resources for present and future generations.
NAFO’s members are the nation’s leaders in sustainable forest stewardship and recognize the fundamental role they play in supplying the nation with forest products, clean air and water, open space, wildlife habitat, recreation, and more.
II. Private forests provide jobs for millions of Americans.
Private forests in the United States support over 2.5 million jobs, $87 billion in payroll, and $115 billion in contribution to the gross domestic product. Forests and the manufacturing they support are key employers in many states. For instance, they support 123,000 jobs in Ohio, 67,000 jobs in New York, 96,000 in Tennessee, and 30,000 in Idaho.
III. Private forests and the jobs they provide are most effectively conserved by ensuring that forestry remains an economically viable land use.
Private working forests and the jobs they support depend upon reliable markets and a reasonable and predictable regulatory environment for continued viability. The U.S. has experienced sustained growth in its forest resources in concert with an ever-increasing demand for renewable forest products. The total forest land base has remained constant for over 100 years, and the total standing inventory of trees on our forests has increased fifty percent over the past 50 years. This is attributable at its core to the fact that viable markets for forest products keep forestland economic compared to other uses, spurring investment in forest management and limiting forest conversion to other land uses that realize a greater economic return.[1] When existing markets for their products are strong, or when new markets like energy emerge, forest owners are able to invest in tree planting and forest health treatments which help maintain the private forest land base, keep private forests economically competitive with other land uses, and maintain family-waged jobs in the forestry sector.
In addition to markets, economic viability depends on a regulatory environment that ensures sustainability within a cost structure that encourages forests as a land use. In the U.S., private forestry operations are governed by a carefully tailored set of laws, regulations, and non-regulatory policies at the federal, state and local level in addition to voluntary, third-party certifications. The resulting framework has developed over many years and is now mature and adapted to resource conditions and needs of individual jurisdictions.[2] The effectiveness of this framework has made the United States a world leader in sustainable forest practices.
The Federal government should take actions to encourage viable markets for forest products and maintain a regulatory framework that encourages forestry as a viable land use that will continue to provide good paying jobs in rural communities and provide multiple public benefits for all Americans.
IV. EPA’s regulation of biomass energy greenhouse gas emissions under the Clean Air Act could stifle renewable energy production, push U.S. forest product manufacturing overseas, and force the conversion of private forests to non-forest uses.
On January 2, 2011, the EPA began regulating greenhouse gas (GHG) emissions under the Clean Air Act through the “Tailoring Rule.” The final Tailoring Rule, without appropriate notice and opportunity to comment, made a sudden change in policy by treating carbon emissions from biomass the same as those of fossil fuels and applying identical permitting requirements to both. The draft rule was consistent with government-wide policy, international conventions and well-established science recognizing that forest biomass recycles carbon from the atmosphere through tree growth and does not increase overall carbon in the atmosphere.
On January 12, 2011, EPA announced that it will publish a final rule by July 1, 2011 to defer the regulation of biomass energy GHG emissions from the Clean Air Act for three years while it further studies the science and public policy implications of regulating biomass energy carbon emissions. EPA’s action is a critical step toward recognizing the full carbon benefits of biomass as a leading source of renewable energy. The three-year moratorium will allow the EPA and the U.S. Department of Agriculture (USDA) to work with Congress, biomass producers and users, scientists and other interested parties to develop a science-based policy supporting a vibrant biomass energy sector for the long term without penalizing biomass energy production in the interim.
Should the EPA revert back to regulating biomass energy GHG emissions the same as fossil fuels, the U.S. will see a reduction in renewable energy from biomass, , a loss of forest product manufacturing capacity and jobs in the U.S. and further pressure to convert private forests to alternative land uses.[3] Economic analysis showed that the market uncertainty caused by the Tailoring Rule could cause the loss of 12,000 to 26,000 renewable energy jobs, decrease capital investment in renewable energy by $18 billion, eliminate 5,384 fewer megawatts of renewable electricity generation, and remove 53.4 million tons of wood biomass from the marketplace.[4]
V. Silviculture’s long standing treatment under the Clean Water Act as a nonpoint source helps protect water quality while ensuring that forestry is an economically viable land use. Court decisions and regulatory action threaten private forestry and the raw materials for U.S. forest product manufacturers.
Since 1976, EPA Clean Water Act (CWA) regulations governing forestry (commonly known as the “silviculture rule”) have defined most forest management activities, including pest control and forest roads, as nonpoint sources of water pollution. Under the CWA, only point sources must obtain permits (commonly known as NPDES permits) for discharges of pollutants into waters of the United States. Nonpoint sources, such as the stormwater runoff from land uses over large areas, are subject to state-developed best management practices (BMPs). Studies indicate that implementation of BMPs in forest management averages nearly 90% nationwide and has been a proven and effective means of protecting and improving water quality. EPA is now considering two actions that would eliminate the long-standing rules governing forestry, require point source permits for forest activities for the first time, and erode the economic viability of private, working forests and the jobs they support.
A. Pesticide application is an important silvicultural tool that is already effectively regulated under federal law.
Pursuant to a court order, EPA issued in June of 2010 a draft general NPDES permit for application of pesticides over, into, or “near” waters of the United States. States are now developing state versions. EPA suggests that the silviculture rule no longer applies to pest control, even though the court order did not address the validity or ongoing application of the silviculture rule . The new permit duplicates protections already adopted by EPA under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) and adds additional paperwork and reporting requirements without providing any additional environmental benefits. EPA registers pesticides and herbicides by approving application criteria in FIFRA approved labels. Because pesticides undergo lengthy testing under FIFRA, including tests to ensure water quality and aquatic species preservation, and because they are useful products, EPA had considered NPDES permits to be unnecessary and duplicative prior to the court’s decision.
B. Forest roads provide access to forests for timber production, replanting, recreation, wildlife management, and more. They are effectively regulated through best management practices (BMPS) as a nonpoint source under the CWA.
Forest roads are one of the forest management activities specifically described by EPA in its 1976 regulations as a “nonpoint source” that do not require NPDES permits under the CWA. Water quality is effectively protected during forest management through the use of BMPs[5]. Several courts have affirmed EPA’s regulation that forest roads are nonpoint sources that do not require NPDES permits. Sierra Club v. Martin, 141 F.3d 803 (8th Cir. 1998); Newton County Wildlife Association v. Rogers, 71 F. Supp 2d. 1268, 1303 (N.D. Ga.1999).
The Northwest Environmental Defense Center (NEDC) sued the Oregon State Forester, the Oregon Board of Forestry, and four timber purchasers alleging that roads in the Tillamook State Forest are “point sources” requiring NPDES permits. NEDC v. Brown. After the U.S. District Court for the District of Oregon upheld the regulation, the U.S. Court of Appeals for the Ninth Circuit determined for the first time in the nearly 35 year history of the silviculture rules that forest roads and their stormwater controls are point sources subject to the NPDES permit requirement. NEDC v. Brown, 617 F.3d 1176 (9th Cir. 2010). The court ruled that the ditches and culverts used by the road system to manage stormwater runoff are within the definition of point source in the CWA, and, therefore, EPA lacked authority to designate them a nonpoint source in 1976.
The Ninth Circuit further ruled that EPA included logging and associated roads within its definition of “industrial activities” subject to Phase I of the stormwater NPDES permit program which require NPDES permits. The court refused to consider EPA’s explanation of its 1990 Phase I regulations and ruled that logging and associated roads must be considered an industrial activity.
The defendants and the intervener industry organizations have asked the Ninth Circuit to reconsider its decision. While the EPA is not a party to this case, the agency has up to this point supported the defendants in district court and on the appeal. However, the U.S. Department of Justice (DOJ) recently filed a brief contravening its earlier positions and arguing for the first time that the silviculture rule is “ambiguous” whether collecting stormwater runoff from forest roads is a “nonpoint source,” notwithstanding the fact that this has been the issue in every lawsuit against forest roads filed over the past 20 years. Notwithstanding this historical re-interpretation by the DOJ, EPA should take appropriate steps to support its regulations, such as formally disagreeing with the Ninth Circuit and re-affirming its long-standing interpretation, ably set out in the 2003 statement by the EPA General Counsel. In addition, there is no need for the EPA to make permit coverage available throughout the country while rehearing is pending since the decision is not in effect and, if affirmed, its scope is limited to the specific parties, which do not include EPA.
VI. Congress should act to ensure that the EPA does not inappropriately regulate biomass energy production and forestry operations under the Clean Air Act and the Clean Water Act.
Congress should take three specific actions to ensure the appropriate treatment of biomass energy and forestry operations under EPA’s authorizing statutes.
First, Congress should ensure that the EPA follows through on its commitment to defer the regulation of biomass energy from the Tailoring Rule for three years pending further review of the science and public policy implications of regulating biomass energy the same as fossil fuels. Congress should also ensure that the EPA’s review of the biomass energy carbon cycle is free from policy bias in any baseline assumptions established to frame the review.
Second, Congress should enact H.R. 872, the Reducing Regulatory Burdens Act, to restore the proven system of regulating pesticide applications uner FIFRAand eliminate duplicative and unnecessary additional requirements.
Third, Congress should monitor the Ninth Circuit’s decision in NEDC v. Brown and, if necessary, enact legislation to affirm the EPA’s long-standing policy that stormwater systems for forest roads are nonpoint sources.
These three specific actions will maintain ongoing benefits from well-established policies with proven environmental benefits, support the competitiveness of the U.S. forest products industry, maintain the good paying jobs this industry provides to Americans across the country, and help maintain forests as a viable ongoing land use.
VII. Conclusion
Private forests in the U.S. support millions of family-waged jobs, provide forest products used by all Americans every day, create opportunities for recreation and the enjoyment of open space. They also provide clean air and water, remove carbon from the atmosphere, supply wildlife habitat, and a variety of other environmental benefits. Forest acreage and overall forest carbon stocks are increasing because forests are an economically viable land use. Conserving these forests as a viable long-term land use by avoiding costly and unnecessary regulations that defeat overall water quality objectives should be a cornerstone environmental policy of the EPA.
Unfortunately, recent actions threaten to frustrate these objectives, create uncertainty in the marketplace that stifle investment in forest management and renewable energy infrastructure, and threaten critical existing and prospective jobs in rural America at a time when economic recovery in these sectors of the economy is vitally needed. We urge the Committee to work with the Administration to align its regulatory actions with longstanding policy objectives and properly position our nation’s private forests as part of our solution rather than casting them as part of a problem that must be regulated. We stand ready with our full resources to help.
Respectfully Submitted,
David P. Tenny
President and CEO
National Alliance of Forest Owners
[1] Environmental Effects of Agricultural Land-Use Change: The Role of Economics and Policy, Ruben Lubowski, Shawn Bucholtz, Roger Claasen, Michael J. Roberts, Joseph C. Cooper, Anna Gueorguieva, and Robert Johansson, USDA Economic Research Service. Economic Research Service Report Number 25 (August 2006).
[2] More information is available at http://nafoalliance.org/environmental-regulation-of-private-forests/.
[3] Unintended Consequences of the EPA Tailoring Rule: Treatment of Biomass Emissions the Same as Fossil Fuel Emissions. Dr. Bruce Lippke and Dr. Elaine Oneil. September 2010.
[4] Economic Impact Analysis of the EPA Greenhouse Gas Tailoring Rule. Dr. Brooks Mendell, Amanda Hamsley Lang, and Dr. Tim Sydor. December 2010.
[5] E.g., BMP effectiveness and related water issues. Dr. George G. Ice. In Proceedings of the Louisiana Natural Resources Symposium, Louisiana State University. 2005.
