By PAULA TRACY, InDepthNH.org

PITTSBURG – A loss of logging revenue from the Connecticut Lakes Headwaters Working Forest could be a significant blow to taxpayers in Pittsburg because revenue from those sales made up close to 10 percent of this year’s tax revenue, said one member of the town’s Selectboard.

Steve Ellis said Friday that this past year, the town collected more than $170,000 from the land. That is a big chunk of the total roughly $2 million collected for the municipal budget and if that is no longer a source of revenue, it would likely mean taxpayers will see higher bills in the future.

More than $45 million in state and federal funds along with private donations secured protections for the land 20 years ago when it was sold by International Paper Company to ensure it would be used in perpetuity for forest products, stay part of the private tax base, provide for recreation and wildlife management rather than being sold for development or as conservation land.

The money was spent on an easement which permanently protects it from development and was intended to be forever logged sustainably to help support the local economy and traditions of the Great North Woods.
The first owners of the 146,000 acre northern tip of the state, Lyme Timber, sold after about seven years to the Forestland Group which merged last October with a larger entity Bluesource Sustainable Forest Company.

Its business plan is primarily selling carbon credits off the land and to keep the trees growing rather than logging it.

While the Forestland Group did sell carbon credits before, it also was logging it. State officials said Wednesday they are asking for a meeting with the company to understand its future management plans.
It comes after local officials said they have been told Bluesource is letting the three current logging contracts expire and have no new plans to feed the mills in the region from the tract.

This could impact loggers, foresters, truckers, mills and is an important aspect of the region’s economy.
Shawn Hagan, a spokesman for Bluesource said Thursday the company is considering extensions to existing logging contracts which are all concluding but he did not specify any new logging purchase contracts for the massive tract, which represents about 3 percent of the state’s landmass.

The impacts to such a plan to use the land primarily for carbon credits are many in addition to the town’s fees and the economy of the North Country.

The Headwaters tract is in Pittsburg primarily but also in neighboring Clarksville and Stewartstown.

Native species – both hunted and protected – live and rely on recently cut areas including moose, ruffed grouse, snowshoe hares and many songbirds.

Gov. Chris Sununu said at the Executive Council meeting Wednesday the land is privately held and property owners have a right to do what they want with the land, but others have countered that is incorrect, and say it is complicated by the state’s rights under the easement it paid for more than two decades ago.

Ellis said he was disappointed that the governor came to Pittsburg this week for a tour of the area but did not notify the selectboard of his visit.

Sununu was photographed at various businesses and at the International Border but there was no prior press notification of his visit.
“It was upsetting to me because he did not contact us,” Ellis said, noting this is the major issue the town is facing.

Charles Levesque, a member of a state advisory committee on the land management, said there is no clear message being sent yet from the new owners but that their mission appears to be taking over former industrial land and selling instead of the wood, credits to capture carbon.

He said the conservation easement the state purchased does not require logging but it was clearly one of the purposes of the easement when it was drafted 20 years ago because of the economic importance of logging to the region.

Pittsburg has a population of 759 residents which has gone down about 10 percent since the last U.S. Census data which had the population at 869.

There is one person for every 2.8 square miles, the lowest density in the state, and the median income is about $45,000 per capita with 17 percent attaining a bachelor of arts degree or higher, according to current state data.

Logging and recreation are the traditional ways people have made money here.

In July, 2001, International Paper, the owners of what was then and still is today the single largest contiguous private ownership in the state, announced the property was for sale after decades of use as industrial land.

U.S. Sen. Jeanne Shaheen, who was governor at the time, and former U.S. Sen. Judd Gregg convened a task force to develop a plan for a public-private partnership while the Trust for Public Land agreed with them to take it off market. The Trust for Public Land purchased the International Paper land for about $34 million, allowing time for a plan to be developed.

In 2003, the state paid for the conservation easement for the property with about $13.5 million in grants from the federal Forest Legacy Program about $10 million from the precursor to the current Land and Community Heritage Investment Program and set up that easement with the stated objectives for the land to be used for forest products, recreation and habitat management.

About 25,000 acres were set aside and sold in fee to the Fish and Game Department for habitat and the remaining were to be sold to a private entity to feed the forest products industry.

“The state will retain a right of first refusal for the 146,500 acre property,” it reads.
In its reasoning, the mission explained that the forest products industry was an important part of a $1.5 billion industry and “as the state’s largest tract, the property is important to the forest products economy of the North Country and the entire state.”

The final recommendation for protection reads that the transaction to timberland investors was to “maintain the north country tradition of private timberland ownership” and to keep a majority of the land on the tax rolls and “allow the land’s private owner to manage the timber…under terms of the conservation easement.”

The easement does require a “regularly” approved forest management plan with the state which the state may reject if logging is not part of its plan and it might come to a lawsuit.
Levesque, who worked on the easement, said it never envisioned a carbon credit market because it didn’t exist at the time.  

Now, with companies interested in reaching a “net zero” carbon footprint, and some like California energy companies that are required by their state law to reduce carbon, they can essentially sell a contract to not cut wood as an alternative for revenue.

Just how much they get paid for the credits is proprietary and not publicly known, but it could be that investors make more money selling the credits than the wood right now.

In fact, a profile of another tract owned by the same group at the Allagash Headwaters in Maine, indicates that the voluntary corporate markets are making it so that carbon revenue exceeds that of timbering.

Jasen Stock, executive director of the NH Timberland Owners Association, said several other large landholders in the state are currently taking advantage of the carbon credit market and that it is seen as a positive and alternative source of revenue to keep the land profitable, particularly now when the price of wood is comparatively low.

Levesque said he plans to give Pittsburg town officials a presentation on carbon credits and how they work Tuesday at the selectboard meeting at 4 p.m. and Ellis said he has invited a number of interested parties including members of the state’s congressional delegation to attend.
The meeting is open to the public.