Arizona Forest Restoration Products

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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 Simons: 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 forest 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.

Pascal Berlioux: Thank you for having me.

Ted Simons: What kind of industry are we talking about here?

Pascal Berlioux: Essentially we are talking about an industry that must be capable of adding enough economic value to the small diameter trees to essentially 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 a forest. What causes the problem in a forest is essentially the thousands of small diameter trees. We're talking about trees five to 12 inches in diameter, typically much too small tor used in traditional sawmilling. The idea here is to move toward what is typically called engineered wood product. Essentially shredding the trees, glueing the strands and pressing it back into a board what everybody knows as OSB.

Ted Simons: Before we get to the products now, let's go back to actually harvesting these trees. What are the challenges? Why is it so difficult? Is it because there isn't a market yet? If you got roads in there to the old growth, you've got roads that can go to the smaller diameter trees, too.

Pascal Berlioux: Yes, that's true. The difficulty, which essentially 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 ecosystem 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 Simons: So you're talking about an economic engine, then, that means jobs and lots of them.

Pascal Berlioux: Absolutely. We have required -- we have asked the northern Arizona University school of business to do an economic impact study on our project. They have confirmed that we are going to give jobs to about 600 people. And we are going to inject about $150 million annually in the Northern Arizona economy.

Ted Simons: Are these proven technologies for getting these small diameter trees out of there and into a market? Obviously technology changes fast and furious. Is there is a proven market for that? Are there proven technologies to get these things to the proven market?

Pascal Berlioux: I think that's a very good point and it actually is a point that's discussed on a regular basis. There is a lot of appeal in emerging technologies such as cellusic ethanol, wood gassification, technologies like that. The problems we are facing with this technology, typically they have not yet made it out of the lab, and they are not available on the industrial scale. What we propose to do, OSB is essentially and technology which is about 20 years old. It's nothing really brilliant or really new, it just works. It makes money and it serves an existing market which has the capability to absorb the product.

Ted Simons: Talk about the dynamic between what you're talking about, kind of an old proven technology. And you can go too quickly on something like this, can't you?

Pascal Berlioux: Yes. Essentially what it takes right now to get to OSB production is essentially building a plant. In our case that is the simple path. Just before that you need to essentially receive contracts from the Forest Service in order to guarantee access to the wood for the period necessary to essentially pay back the loans that you're going to have to you incur to build the plant.

Ted Simons: 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 support a million acres, 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 essentially thinning 30,000 acres per year, over a period of 20 years. So that essentially would give you something like 600,000 acres. To get to the million acres, and I think it is a point very important to America and Arizona right now, 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 in the White Mountains which have done an extraordinary job over the last couple years in essentially pioneering this concept-of-thinning, and essentially operating under the White Mountains contract.

Ted Simons: Last question: If there is a patch of land the Forest Service says that is a tinderbox. If a fire comes through here, that town that, that area is going to burn. We need someone to go thin this out. Can you go do that? Or does topography make a difference? You can't thin out everything,correct?

Pascal Berlioux: There are places usually you cannot go, steep slope over 40%, some riparian area where you do not want to go on. So there are limitations. This is where the concept of strategically placing the treatment comes into full value. You don't need to thin a million acres to protect a million acres, you can do it by thinning strategically patches of land within that area.

Ted Simons: Be strategic and let it happen?

Pascal Berlioux: And keep the hope.

Ted Simons: Thanks for joining us tonight, we appreciate it.

Pascal Berlioux: My pleasure.

Pascal Berlioux:President and CEO,Arizona Forest Restoration Products;

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