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Timber Talk 4.29.13

Posted By John Dorka, Monday, May 6, 2013

April 28, 2013 Issue

Legislative News

  • Energy - There has been a lot of talk in the legislature about changes to the Ohio Energy Law (SB 221, 127th General Assembly). Last week, the Senate Public Utilities Co, Committee Chairman Bill Seitz (R-Cincinnati) said he has no plans to repeal the law, contrary to concerns from some environmental groups. He said he simply wants to modify it. The review started after FirstEnergy last year attempted to put a freeze on the increasing standards for utilities to convert to alternative energy. That attempt failed, but it started efforts to review the standards. The committee wrapped up testimony over the last couple weeks to look at the issues. Senator Seitz intends to come up with legislation on modifications later in the spring session or in the fall. Part of the question on the standards modification involves the formula for determining energy efficiency costs to customers which are "non-bypassable.” All consumers pay for them, even if they are not participating in efficiency measures for things like weatherization or lower energy appliances. There is a mixed bag of support among the manufacturing community and environmental community (see below.)
  • Oil and Gas - ODNR Director Jim Zehringer asked the Senate General Finance Government Subcommittee last week to put back into the budget bill some new rules governing oil and gas drilling activity that were removed by the House. The rules governed such actions as testing oil and gas waste material for radium before moving it to landfills, a permitting process for treating brine before it is discharged into the ground or bodies of water, and prevent brine from horizontal wells from being used on roads for dust or ice control. The Director also requested $14.5 million from the General Fund to subsidize the Oil and Gas Division until severance taxes pay for Division activities, which would be paid for by severance taxes as they increased in the future.
  • Ohio Manufacturing Association (OMA) Sides With Environmentalists on Ohio Energy Efficiency Law - The Senate Public Utilities Committee appears to be making plans to review Ohio’s green energy law (SB 221, 2008) for revision of the renewable energy standards. That law required that Ohio utilities must provide 12.5% energy production from renewable sources by 2015. OMA argued that the standards should be retained as energy efficiency programs are much cheaper than constructing new power plants. OMA said that energy efficiency standards could save customers $5.6 billion in avoided energy costs, according to a report done by the American Council for an Energy-Efficient Economy. OMA further argued that easing or eliminating the standards would turn cost savings into higher prices and increase customer exposure to a more unstable price market. OMA marched with the Ohio Environmental Council, Sierra Club, Environmental Law and Policy Center, and the Mid-Ohio Regional Planning Commission on this position. However, other interests, including Continental Economics and Save Western Ohio argued that energy costs will not go down but will in fact increase with elimination of market forces and continued subsidies for renewable energy sources.

Forest and Wood Products Export Workshop – OSU South Centers
This past week, OFA was a co-sponsor of the Forest and Wood Products Export Workshop at the OSU South Centers facility in Piketon. The event was organized by the Small Business Development Center at the OSU Piketon Center and co-sponsored by OFA, SBA, and the US Commercial Service. There were 43 registered for the event, about half from the hardwood industry and the other half from various organizations and agencies. The presentations were excellent, highlighted in particular with presentations from Dr. Eric McConnell, Forest Products Specialist from OSU Extension who spoke on Ohio’s Forest Industry – Domestic and Abroad and Mike Snow, Executive Director, American Hardwood Export Council (AHEC) who spoke on US Exports and the Globalization of the Hardwood Industry. If you want to see the information that Mike provided, here is a copy of Mike’s presentation in a pdf format.

Carbon Tax Proposal
You may have seen that there is talk of a Congressional proposal for a carbon tax. The National Association of Manufacturers has responded with a report, Economic Outcomes of a U.S. Carbon Tax which you can read the Executive Summary on-line. The report modeled two scenarios for a carbon tax: one involved a $20/ton and the other an 80% reduction in carbon generated, both for a 40-year period from 2013-2053. The conclusions from the report include:

  • Revenue raised by the carbon tax would be far outweighed by the economic impacts;
  • A carbon tax would have negative impacts on consumption, investments, and jobs, resulting in lower federal revenues from taxes on capital and labor;
  • The net revenue from the carbon tax for deficit and debt reduction and lower tax rates is small;
  • There would be an increased cost for coal, natural gas, and petroleum products which would ripple through the economy, resulting in higher production costs and less spending on non-energy goods;
  • Higher costs and lower productivity would lead to lower real wage rates from companies;
  • There would be significant reduction in manufacturing output over time, by as much as 15% from energy intensive manufacturing to 7.7% reduction for non-energy intensive manufacturing sectors.

The summary indicates that the greatest economic impacts would come from the 80% carbon reduction scenario compared to the carbon tax.
Late Notice: OFA is considering co-signing a letter originated from the National Association of Manufacturers in opposition to the propose carbon tax. OFA is getting Board feedback and will decide by the April 30 deadline. The letter will be sent from trade associations only. The letter is addressed to Sen. Max Baucus, Chairman, Committee on Finance; Sen. Dave Camp, Chairman, Committee on Ways and Means; Sen. Orrin Hatch, Ranking Member, Committee on Finance; and Sen. Sander Levin, Ranking Member, Committee on Ways and Means. If OFA co-signs, the letter will be included next week.

Silviculture Regulatory Consistency Act to be Introduced Soon in the US House and Senate
Referred to as the "Forest Roads” bill, the Silviculture Regulatory Consistency Act is soon to be introduced in both the House and the Senate, as had been planned regardless of the recent US Supreme Court decision over-turning the 9th Circuit Court decision on Clean Water Act permitting for logging roads. The purpose of the legislation is to make permanent in law the designation of silviculture and logging roads as non-point sources of pollution and thus not subject to point source pollution permits. Case in point, the National Environmental Defense Center recently filed a motion in the 9thCircuit Court to consider logging roads as point sources of pollution (they don’t quit). Sponsors to the current bill are all from the Pacific Northwest but there will be an effort to get broader and bi-partisan sponsorship down the road.
TreeTaggr – Mobile Forest Health Tool
If nothing else, I thought you might find this interesting. The website is a classified ad for a mobile phone app that can be used to track tree diseases. The app is not yet fully developed and part of the ad is a request for funding to create the tool – another new technological approach to accrue capital for product development. Briefly, the tool would allow users to take a picture of an unhealthy tree, track the location coordinates, and then pass along notes about the tree conditions to a national geo-location database. The information could be used by health experts to assess the tree problem. Part of the ad includes a request from potential users to contribute to the product development. The money would be "donated” to the Institute of Forest Biotechnology which is a 501-c-3 non-profit and most of the donations are tax deductible. I am providing this only to let you know that this is being developed, and not to encourage you donations. In fact, the development of this "tool” gives me pause knowing how the information may be used. At first glance it is to deal with forest health issues. But I have concern about sending private property information to a "database in the sky” that can be accessed by anyone. I’m one of those guys who has always felt uncomfortable with public "cameras” proliferating in our land. I’m well aware of the arguments on the good use of cameras in the recent Boston bombings and know that there are many benefits. But as there is with everything, there are always two sides to the issues and arguments. These are not necessarily OFA concerns. Just my thoughts.
Green Globes as an Alternative Green Building Code to LEED
Much has been written of late about the LEED green building standard and its discrimination against all certified wood except for FSC certified. A couple states have recently passed legislation prohibiting the use of LEED or any green building standard that is not open to all verified certification standards. Green Globes, which is overseen by the Green Building Initiative, recognizes wood certified under any third-party verified system. You can read a very good article that describes Green Globes as a Practical, Web-based Alternative to LEED.
Small Business Training for the Affordable Care Act
As a business owner, do you have a need to learn more about "Obamacare”? If so, a consortium of business groups is hosting training on the Affordable Care Act on May 7, 2013 from 10 AM to 2 PM at the OSU South Centers/Endeavor Center in Piketon. A flyer for the workshop can be found here. Two experts from the health care industry will be presenting: Rick Patrick of Patrick Consulting Group has 37 years’ experience in the area of employee benefits and Barry Peel is an Economic Development Specialist and Affordable Care Act expert from the Small Business Administration. There is no fee for attendance and lunch will be included. You are asked to register ahead of time: email Mike Rowe at or call 740‐289‐2071 ext. 252.
Other Upcoming Events
  • Ohio’s Non-Native Invasives, May 17, 2013; OSU-Mansfield Campus, registration $45/$55; register on-line: (see flyer here)
  • Tree School, May 18, 2013; OSU-Mansfield Campus, registration $45/$55; register on-line: (see flyer here)
  • OFA Forestry and Wildlife Conservation Camp, June 9-14, 2013; FFA Camp Muskingum, Carroll County
  • Lumber Grading Short Course, June 10-13, 2013, Yoder Lumber Company, Millersburg, OH (Buckhorn Mill); register on-line
  • OWIN Summer Meeting, July 24-25, 2013, Christopher Conference Center, Chillicothe, OH
  • OFA Lumberman’s Outing Golf and Clay Shoot, September 11, 2013
  • Paul Bunyan Show, October 4-6, 2013, Guernsey County Fairgrounds

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