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Host: Ted Simons
Arizona Forest Restoration Products
Pascal Berlioux, the president and CEO of Arizona
Forest Restoration Products, talks about his company’s business model
that he says makes it profitable for companies to remove small diameter
trees that clog Arizona’s forests, creating a severe fire danger.
Ted Simon: Most forestry experts agree that Arizona’s forests are
in need of thinning. For proof, they point to increasing numbers of
massive and damaging wildfires across the state. But, removing small
diameter trees that clog the forests and fuel the fires has never been
economically attractive to private industry. A Flagstaff company
believes it has a solution, and a profitable one at that. Here to
explain is Pascal Berlioux, president and CEO of Arizona Forest
Restoration Products. Good to have you, thanks for joining us.
Pascal Berlioux: Thank you for having me.
Ted Simon: What kind of industry are we talking about here?
Pascal Berlioux: Well, essentially we are talking about an
industry that must be capable of adding enough economic value to the
small diameter trees to make restorative thinning pay for itself. Now,
the problem with restoration in the Southwest and northern Arizona
specifically, is that, obviously, what needs to come out of the forest
is not the big trees. Whatever remaining old growth and large trees we
have left are not, as we all know, what causes the problem in our
forests. What causes the problem in our forests is essentially these
thousands of small diameter trees. We are talking about trees five to
twelve inches in diameter typically, much too small to be used in
traditional sawmilling. So the idea here it to move toward what is
typically called engineered wood products. Essentially shredding the
trees, gluing the strands, and pressing that back typically in oriented
strand boards, what everybody knows as OSB.
Ted Simon: Yes. Before we get to the products now, let us go back
to actually harvesting these trees. What are the challenges, why is it
so difficult? Is it simply because there is not a market yet, because it
would seem that if you got roads in there that can go to the old growth,
you got roads in there that can go to the smaller diameter trees too.
Pascal Berlioux: Yes, that is true. And the difficulty which has
been the most important one is to view the problem that we have to face
not from the perspective of commercial logging, because this is not what
we are looking at, it is to view the problem from the perspective of
ecosystems restoration. The idea here is not to go and make money on the
wood. The idea is to design an economic engine which has the capability
to implement collaboratively defined restoration.
Ted Simon: So you are talking about an economic engine, then that
means jobs, and a lot of them.
Pascal Berlioux: Absolutely. We have asked the Northern Arizona
University School of Business to do an economic impact study on our
project, and they have confirmed that we are going to give jobs to about
600 people, and we are going to inject about $170 million annually in
the northern Arizona economy.
Ted Simon: Are these proven technologies for getting these small
diameter trees out of there and into a market? Obviously the technology
changes fast and furious, is there a proven market for that and are
there proven technologies to get these things to the proven markets?
Pascal Berlioux: You know, I think that this is a very good
point, and it actually is a point which is discussed on a regular basis.
There is a lot of appeal in emerging technologies such as cellulosic
ethanol, wood gasification, or technologies like that. The problem that
we are facing with these technologies is that typically they have not
yet made it out of the lab, and they are not scalable at the industrial
scale. What we propose to do, OSB, is essentially a technology which is
about 20 years old. There is nothing really brilliant or really new
about it. It just works, it makes money, and it serves an existing
market which has the capability to absorb the product.
Ted Simon: Talk about the dynamic between what you are talking
about, which is, as you say kind of an old technology, it is proven, and
all these new... You can get to it quickly on something like this, can’t
you?
Pascal Berlioux: Yes, essentially what it takes right now to go
to OSB production is building a plant. In our case, that is the simple
part. Just before that, what you need to do is to receive contracts from
the Forest Service in order to guarantee access to the wood for the
period necessary to pay back the loans that you are going to have to
incur to build the plant.
Ted Simon: The idea of this particular industry not only paying
for itself but showing a profit to whoever is involved, how far away are
we from something like that, a)? and b) is this particular industry
capable of a million acres, or something along those lines, of thinning?
Pascal Berlioux: So, answering the second question first, if you
don’t mind. Can this industry handle a million acres? The answer is
clearly yes. But of course this is a question that needs to be put in a
time period. What we are looking at right now is thinning 30,000 acres
per year over a period of 20 years. So that would give you something
like 600,000 acres. To get to the million acres, and I think it is a
point which is very important to make in Arizona right now, is that the
industry that we propose is not the only solution. We are looking at
proposing a new appropriate scale industry not instead, but in addition
to the well developed businesses of the White Mountain which have done
an extraordinary job over the last couple years in pioneering this
concept of thinning and operating under the White Mountain Stewardship
Contract.
Ted Simon: Last question. If there is a patch of land the Forest
Service says “that is a tinder box, if a fire ever comes through here,
that town, that area is going to burn, we need someone to go thin this
out”, is that the kind of thing where you can do it, or does topography
make a difference? You can’t thin out everything correct? I mean some of
this is going to be a little more difficult than others.
Pascal Berlioux: Well there are places where obviously you cannot
go, steep slopes over 40%, some riparian areas where you do not want to
go, wilderness, and so on. So, there are limitations, and this is where
the concept of strategically placing the treatments comes into full
value. You do not need to thin a million acres to protect a million
acres. You can protect a million acres by thinning strategically patches
of land dispersed within that area.
Ted Simon: Be strategic and let it happen hum?
Pascal Berlioux: And keep the hope.
Ted Simon: There we go. Thank you so much for joining us, we
appreciate it.
Pascal Berlioux: My pleasure.
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