FIGHTING FOR THE FORESTS

By EUGENE LINDEN/KETCHIKAN; JOHN SKOW; SAM ALLIS;

Trees, jobs, and profits--these were fighting words across the country last week as industry, environmental and political groups fought over the future of huge tracts of forest land that lie before the logger's axe. Fights are inevitable when the economic interests of the present collide with the desire to preserve ecosystems for the future. But one of the surprising lessons of the bruising battles over the environment in the past few years is that green sentiment is again a powerful political force. That's why Alaska Senator Frank Murkowski failed to ram through legislation that would have facilitated timber cutting in the Tongass National Forest. In California the Clinton Administration reached an agreement that would protect Headwaters, a privately owned grove of ancient redwoods that has been the focus of protests for years. And in Maine voters moved closer to imposing controls on clear-cutting in a state where timber interests own almost half the land.

CUTTING DOWN ALASKA'S G.O.P., CONGRESS SAVES THE TONGASS

Poised between the Pacific and southeast Alaskan coastal glaciers lies Tongass National Forest. Don't let the Alaska address fool you: Tongass is a rain forest. Protected from snow by the tree canopy and from the frigid air by the warmer ocean winds, deer browse among ancient groves of Sitka spruce, yellow cedar and hemlock. The shelter of these giants is vital for wildlife, but the trees are also the prize sought by loggers--a single 200-ft. Sitka spruce may yield 10,000 board feet of timber so fine it can be used to make pianos and guitars. Lesser trees fuel pulp mills that mean hundreds of jobs. Thus the debate over the rights to this temperate paradise has been anything but temperate.

For conservationists, who watch in horror as the global timber machine chews up the world's wilderness, the Tongass had become a test of whether even the richest nation on earth can muster the will to control the forces of deforestation. Logging supporters, and that would include Alaska's Republican Senator Murkowski, seethe over any attempts to restrict harvesting of what they view as a renewable resource.

In last week's congressional battle the issue was the fate of a pulp mill owned by the Ketchikan Pulp Co., a division of Louisiana-Pacific Corp. that employs 600. It's a high-cost operation that relied on below-market-cost timber from the Tongass to make dissolving pulp, a cellulose product that shows up in everything from rayon to ice cream. Tongass timber was cheap because in 1954 the Federal Government gave KPC a 50-year contract guaranteeing the mill rights to vast amounts of Alaskan timber at fire-sale prices. In 1990 Congress tried to redress this giveaway by passing the Tongass Timber Reform Act, which forced KPC to pay market prices. KPC later sued for breach of contract and threatened to close the Tongass pulp operation if Congress did not extend the contract for 15 years beyond its 2004 expiration date and restore bargain-basement timber prices. With Alaska's delegation occupying key positions on congressional committees, it looked as though KPC would get its way, and Murkowski would protect the state's jobs. Said he: "If the pulp operation goes, all logging in southeast Alaska will collapse as well."

While the Senator blustered, Louisiana-Pacific was getting ready to toss the mill overboard. Why? As a financial proposition, logging in remote, southeast Alaska is problematic because of the high cost of Alaskan labor and the expense of building logging roads. Now, with pulp prices falling, the company is facing increasing competition from mills with cheap labor and fast-growing trees.

When it became clear that other Republicans, already bruised by the backlash to the perceived antienvironmental bias of their party, were unwilling to help him, Murkowski shifted his strategy. As Congress tried to adjourn, he vowed to hold up an omnibus parks bill that would, among many other provisions, protect Sterling Forest in the Northeast and provide funding for San Francisco's Presidio, a new national park, unless the Administration agreed to supply cheap timber for KPC's sawmills. He failed, settling for an agreement that would provide timber to the mills at market prices for a two-year transition period--a fine deal for a Republican Party that celebrates the free market. Will logging end? Probably not, but the expectation is that tourists who merely want to look at trees will create jobs for those who used to chop them down.

--By Eugene Linden/Ketchikan

CALIFORNIA RANSOMING REDWOODS FROM A TIMBER TYCOON

The fifth or sixth reel of an ongoing eco-melodrama involving the threatened cutting of ancient California redwoods on the foggy north coast flickered to a close last week, though more perils lurked. There lay the heroine, hog-tied to the tracks; there came the choo-choo; there gloated the villain, twirling his mustache. Logging was to begin in three days. Negotiators for the U.S. Department of the Interior were scripted as heroes at a day-long wrangle at the Washington office of California Senator Dianne Feinstein.

In the end the heroes had probably preserved two redwood groves in Humboldt County, one of them the celebrated 3,000-acre Headwaters tract, a spectacular forest of towering, ancient redwoods--the largest still in private hands. And they knew for certain that they had sacrificed four smaller groves, rich with endangered wildlife. Activists at Owl Creek, one of the doomed groves, climbed the big trees and spread banners: DON'T RAPE THE REDWOODS.

The bad guy, if you see things that way, is Charles Hurwitz, a Houston-based junk-bond wizard who plays the corporate-villain role well. Charlie's sin? He owns the trees, and he'll cut them if he wants to--and does he want to. In 1986 his company, MAXXAM (1995 sales: $2.57 billion), bought Pacific Lumber, the redwoods' owner. Hurwitz visited PL's Scotia, California, mill, and told workers he believed in the golden rule: "He who has the gold, rules." Then he drained $55 million from PL's $93 million pension fund, and cranked up the timber cut to pay off his debt. A redwood 300 ft. high and 18 ft. in diameter can bring $200,000 as a sawlog.

No environmentalists took part in the meeting at Feinstein's office. Greens have tied up PL's logging in federal court, so Hurwitz would not sit with them. A marathon bargaining session produced a highly complicated agreement that promised to turn over $380 million in cash and land (value and location subject to haggling) to Pacific Lumber. If Hurwitz is satisfied, he passes title to Headwaters, the 425-acre Elk Head grove and a logged-over moonscape between, totaling 7,500 acres. If not, PL's fallers start their chainsaws.

Spend a night in Headwaters and it's easy to see why protesters have flooded into these woods to stop the loggers. Wake before dawn to hear the high-pitched keer of marbled murrelets, the rare, threatened seabirds that nest only in the top of old-growth redwoods. Vast, dark shapes begin to form: the trunks of enormous redwoods and Douglas firs rising as if to hold up the sky. Greens nationwide had hoped for a pact that would have spared some 60,000 acres--all six ancient groves, and the partly logged land between--as habitat for spotted owls, peregrine falcons and coho salmon.

Spend a few minutes analyzing Hurwitz and it's easy to see why he doesn't care. As it happens, he is neck deep in U.S. claims resulting from the $1.6 billion collapse of a Texas savings and loan he controlled. There was talk of a "debt-for-nature" swap involving Hurwitz' redwoods and the litigation, but banking regulators wouldn't go for it.

Feinstein called the agreement "win-win," which in matters environmental means nobody is happy. Either party can back out of the agreement on two weeks' notice. Like all good negotiators, Hurwitz knows when to ask for more, and the Greens are certain he will. They now refer sarcastically to the preserved tracts as a tree museum.

--By John Skow. With reporting by Adam Zagorin/Washington

MAINE CLEAR-CUTTING BECOMES A BALLOT ISSUE IN THE PINE TREE STATE

It is remarkable to think that the issue of clear-cutting would trigger such a fierce debate in Maine, a state Ralph Nader once called "a paper plantation." Unlike the West, almost half the state is in the hands of private timber interests. This is the largest concentration of industry ownership in the country. Just 15 corporate landlords own 9.6 million acres, primarily in the North Woods, the great dark forest blanketing Maine's upper reaches. The same industry produced $5.5 billion worth of paper and lumber products last year, as well as 26,000 jobs for this hard-pressed economy. Such numbers have persuaded generations of legislators that what is good for timber is good for the Pine Tree State.

Today the timber industry no longer enjoys the absolute fealty it once did. Mainers have watched with alarm over the past two decades as some 2,000 sq. mi. of forest--roughly the area of Delaware--have been clear-cut. From the air, the rich coat of the North Woods looks like it has mange. In the past five years, softwoods such as spruce and fir have been chopped down at a pace almost double their rate of growth. "There is no question that clear-cutting was overused," concedes Roger Milliken, one of the most progressive of the large landowners.

That explains how former Green Party gubernatorial candidate Jonathan Carter stunned the Establishment by gathering 58,000 signatures in favor of a total ban on clear-cutting--enough to place the issue on the Nov. 5 ballot as a referendum. Voters will decide if they want to halt the practice outright, reduce it or do nothing.

Carter spooked the timber interests as never before. If passed, the ban would be the most severe restriction on timber harvests in the country. "It would devastate the forest-products industry," says Vic Berardelli, its spokesman in Augusta. The industry responded with a $1.8 million war chest to try to defeat the referendum--a huge effort in Maine.

A third alternative, forged among centrist environmentalists, Governor Angus King and the big landowners, emerged in June to blunt both extremes. Under the Compact for Maine's Forests, big timber companies could clear-cut no more than 1% of their land each year, and the maximum allowable clear-cut would shrink from 250 to 75 acres. More important in the long run, they would abide by voluntary standards to preserve sustainable levels of tree harvesting, and protect soil, water and biodiversity. The compact also would create a compliance system managed by independent auditors.

Carter dismissed this as a sham. "It won't put the brakes on them at all," he warns. King counters that the total ban would cost the state 15,000 jobs and over $1 billion. "Jonathan [Carter] asked the right question, but he gave the wrong answer," says King. "His program would be a disaster for Maine." Perhaps. But without Carter, the timber industry never would have negotiated in the first place. A clear majority of Maine voters now opposes the status quo. The days of the paper plantation may be waning.

--By Sam Allis. Reported by Rod Paul/Portsmouth, New Hampshire

With reporting by ADAM ZAGORIN/WASHINGTON;, ROD PAUL/PORTSMOUTH, NEW HAMPSHIRE