With several of Oregon’s most timber-dependent counties sliding toward insolvency, the state’s political leaders are looking to the O&C lands for a way out of the crisis.

A unique class of property that reverted to federal ownership after a scandal involving the Oregon & California Railroad, the O&C lands form a 2.8 million-acre checkerboard across 18 counties in Western Oregon, almost all of it administered by the Bureau of Land Management.

Those lands provided a steady stream of timber revenues to compensate their host counties for the loss of property tax payments until the 1990s, when the Northwest Forest Plan curtailed logging on federal forests to protect endangered wildlife such as the northern spotted owl.

Now, with a series of supplemental funding measures running out, Oregon’s congressional representatives are working on a more permanent solution that would boost logging on parts of the O&C lands while increasing conservation protections on the rest.

A bill sponsored by Reps. Peter DeFazio, Greg Walden and Kurt Schrader passed the House in September, and Sen. Ron Wyden hopes to introduce a similar measure in the upper chamber by the end of this month.

Predictably, the battle is playing out along familiar ideological lines, with timber interests calling for passage and environmentalists arguing against increasing the cut.

But a secondary front may be opening in an unexpected quarter: municipal watersheds.

Benton County resident Jim Fairchild, a former member of the Corvallis Watershed Advisory Commission, has raised concerns about the impact on the city’s water supply if timber harvest levels go up on O&C lands.

Corvallis gets most of its drinking water from the Willamette River, but about 30 percent comes from a 10,000-acre reservation on the east slope of Marys Peak. Only about a quarter of that land is actually owned by the city; the rest is managed by the Siuslaw National Forest.

But it turns out that a portion of the municipal watershed — a total of 1,720 acres in several scattered parcels — is O&C land, and that’s the part Fairchild is worried about.

“It could all be up for (logging) consideration,” Fairchild said.

Both the city and the Forest Service do a certain amount of logging already on the Corvallis Municipal Watershed. But it’s on a fairly small scale and is generally limited to thinning operations that take out younger trees while leaving older ones.

Fairchild is afraid that some or all of the watershed’s O&C acreage could be designated for industrial-scale logging. If that happens, he argues, it could disrupt the Corvallis water supply, damage fragile wildlife habitat and cause a cascade of environmental problems downstream, in the Marys and Willamette rivers.

“All of this is just raising the flag,” he said.

He points out other municipal water systems in Western Oregon have expressed concerns about the possible impact of the pending legislation. In response to inquiries by Wyden, public water managers in Eugene, Springfield and Clackamas County asked that special care be taken to shield municipal water supplies from the impacts of logging, such as increased turbidity from sediment-laden runoff.

“They’re all worried about turbidity,” Fairchild said. “It makes the water harder to treat.”

But Tom Penpraze, who manages the Corvallis Utilities Division, said he’s not worried about that. The city’s Rock Creek Water Treatment Plant, he insists, is perfectly capable of handling the extra turbidity.

“It was common practice to do clearcut logging up until 1988 on Forest Service land and city land (in the watershed),” Penpraze said.

“There was no impact on our ability to treat the water.”

Since the Northwest Forest Plan went into effect, virtually all of the Siuslaw National Forest — including the portion inside the Corvallis Municipal Watershed — has been designated late successional reserve.

That means it is to be managed in a way that protects threatened fish and wildlife. Clearcutting is a thing of the past, and thinning is done only on second-growth plantations with an eye toward encouraging old growth forest characteristics.

“That’s doubly true of the Corvallis watershed,” Siuslaw National Forest Supervisor Jerry Ingersoll said.

“You’re taking a broad-based plan that emphasizes old growth characteristics and superimposing that on a watershed that emphasizes water quality, and those reinforce each other.”

Ingersoll did not want to comment on the specifics of either of the O&C measures working their way through Congress, but he acknowledged that both plans could lead to heavier logging in the watershed.

“If it did apply to those particular lands, there is a potential,” he said.

Peter DeFazio thinks Fairchild’s fears of environmental degradation are misplaced.

The House bill he co-sponsored, known as the O&C Trust, Conservation and Jobs Act, would set aside 55 percent of all O&C lands for conservation purposes, including 90,000 acres of new wilderness area and 130 miles of additional Wild and Scenic River designation.

“Anything that’s old growth would be moved to the Forest Service, and it would not be in the Forest Service harvest base, so it would be essentially protected,” he said.

The remaining 45 percent would go into a trust to be managed for timber production with most of the proceeds going to the O&C counties ($10 million a year would go to the federal government).

But even though logging would increase sharply on the trust lands, DeFazio contends the bill provides plenty of safeguards for water quality and the environment. Old growth stands would not be logged, he insists, and the buffer zones around rivers and streams would be substantially larger than what’s required in the Oregon Forest Practices Act.

He couldn’t say for sure which category the O&C lands inside the Corvallis Municipal Watershed fallinto because they’re part of a small subset known as controverted lands — property that was granted to the Oregon & California Railroad, returned to the federal government and then transferred from BLM to Forest Service jurisdiction.

Because the vast majority of O&C lands are managed by the BLM, DeFazio’s staff is using a BLM database to determine which lands meet criteria for special protections and which would be opened up for logging as part of the O&C Trust. Controverted lands like those in the Corvallis watershed are covered by different mapping software, so it will take longer to get them sorted out.

But DeFazio added that he’s open to the idea of adding special protections for public watersheds at the conference committee level if the Senate passes Wyden’s O&C lands bill.

And Tom Towslee, Wyden’s state communications director, said the senator has “heard the message” from public water managers.

“We have every intention of protecting watersheds in the bill,” Towslee said.

“I think we can say as a blanket statement that if harvesting trees in those watersheds would be detrimental to water quality, then those trees won’t be harvested.”

The whole idea, DeFazio said, is to address the concerns of environmentalists while putting loggers and millhands back to work and meeting the financial needs of cash-strapped timber counties — needs the O&C lands were set up specifically to serve.

“The O&C lands are absolutely unique in the federal system. The O&C Act says these lands are to be managed in perpetuity for timber harvest, and counties are to get 50 percent of the proceeds. It’s very simple,” DeFazio said.

“There is an inherent conflict between that mandate and modern environmental laws,” he acknowledged.

“(But) I think this is a unique Oregon problem that requires a unique Oregon solution — the status quo is not sustainable.”

Contact reporter Bennett Hall at bennett.hall@gazettetimes.com or 541-758-9529.

Reporter Bennett Hall can be contacted at 541-758-9529 or bennett.hall@gazettetimes.com.

Special Projects Editor, Corvallis Gazette-Times and Albany Democrat-Herald

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