Monday, September 27, 2021

IFG says lawsuits derailed St. Regis lumber mill

Mineral Independent | September 15, 2021 12:00 AM

The September Mineral County Resource Coalition meeting came a week after the announcement that Idaho Forest Group was closing their St. Regis mill and that subject was the key point of discussion.

Willy Peck, Outreach Forester for Idaho Forest Group, said the closure grabbed him by surprise.

“I had no indication that this was coming down the pike more than anyone else. I heard about it when everybody did. Maybe a little bit earlier as I heard about it Monday morning,” he said. “I don’t know if I have all of the answers, but I do have an explanation that I want to share with everybody,” Peck stated.

“The decision to shut down was not a resource issue. We have a large volume of timber in the yard and under contract at the mill. It’s strictly about economics," Peck said. "We have the cheapest log here as any of the mills of IFG. It’s a good log but right now the mill efficiency and costs are too high.”

Peck explained that millions of dollars have already been invested in the St. Regis mill but another $40-$50 million is needed to upgrade to where it should be at this time.

“Before Mark (Brinkmeyer, IFG owner) is willing to put that amount of money out, he needs to understand that there is some certainty of supply going ahead. That we (IFG) can at least see that maybe 10 years out that we’re going to have the type of volume we need to run the mill as an efficient operation,” Peck said.

Peck said that he has personally tried to demonstrate that the last 2 1/2 years, unsuccessfully.

“It’s not that the forests aren’t doing their job. It’s not that the resources aren’t available. It’s the uncertainty with all of the litigation. Getting the biological opinions completed with the U.S. Fish and Wildlife services in a timely manner is a huge part of the equation.”

Peck went on to say that he can sympathize with them because the workload that has been placed on them has been increased tremendously and that their funding has not been keep up with for all of the extra responsibilities.

This delays projects for future timber production and that uncertainty is troubling when IFG needs to have production forecasts today.

“The bigger part is the litigation. We depend on Region 1 (USFS) for a great deal of our volume, and today, there is 416 million board feet under some form of litigation. That’s huge!" Peck said. "Then we have two projects in Idaho that just recently got litigated with 300 million board feet,” he explained. “So, you look at those things and it’s not hard to understand why somebody like Mark would be reluctant to invest another $50 million.”

Bert Lindler, MCEDC member, asked if workforce challenges were addressed in the decision to close where Peck said they were, but delays due to litigation made the future unclear for future production was a much larger reason.

“For example,” Peck said, “It took 5 years after the NEPA (National Environmental Policy Act) which was still not nearly complete, to get through Canadian lynx issues and things associated with it. I’m not condemning what needs to be done. But how certain is it that we are going to have the amount of board feet we’re bidding on. There's never any absolutes and IFG isn’t asking for that. If IFG gets the sale or Pyramid (in Seeley Lake) or whoever gets it, they have to be able to forecast production dates and the time delay of not knowing doesn’t pencil out as often as we need it to.”

This is the fourth time that Peck has gone through a mill closure which is frustrating, but understandable unless changes are made.

Peck also said that the last sentence in the letter from IFG stated that they would take another look at this decision in early 2022.