“Silent Killer” Strikes Again
William F. Jasper
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The New American, January 26, 2004
The family-owned Wetsel-Oviatt Lumber Company of El Dorado Hills, California, is a recent tragic victim of the regulatory monster. |
A recent tragic victim of the regulatory monster is the family-owned Wetsel-Oviatt Lumber Company of El Dorado Hills, California. Cecil Wetsel, the president and CEO of the company, announced in August of last year that the company started by his grandfather in 1939 would be closing. A leader and innovator in the forestry and wood-products industry, Cecil Wetsel was recognized with the Outstanding Achievement in Sustainable Forestry Award in 2002 by the American Forest Foundation.
In presenting the award, the foundation noted that:
Wetsel, who plants an average of 12 trees for each one harvested, has created a forestry operation that stands as a shining example of stewardship for touring students and teachers alike. His company now owns and manages more than 17,600 acres of timberland. In fact, 28 percent of those acres were non-productive land purchased after they had been devastated by fire, over-logging and mining. Since Wetsel-Oviatt purchased the land, those acres have been rehabilitated and reforested to create healthy new forests for the future.
Exactly the kind of responsible stewardship and citizenship that government policy should welcome and encourage, right? One would think so, but sadly, that is not the case. For years Wetsel-Oviatt had struggled to obtain enough logs to keep its mill open. This meant buying timber from the National Forests, in addition to logging its own forestlands. However, in the early 1990s, the U.S. Forest Service, in connivance with environmental groups, repeatedly blocked timber sales that had already been awarded to Wetsel-Oviatt. The Forest Service falsely claimed that the timber sales in question included spotted owl habitat. Years later, when the company finally got its day in Federal Claims Court, Judge Lawrence S. Margolis ruled that the Forest Service action in denying the sale was “arbitrary, capricious and without rational basis.”
Judge Margolis’ 1998 ruling also found that the officials knew their findings were faulty when they ordered the sale canceled. He therefore ruled that the Forest Service had acted in breach of contract. Finally, in 2002, the federal government agreed to pay Wetsel-Oviatt $9.5 million for four canceled timber sales. But that was not sufficient to compensate for all of the state and federal regulations that constantly hamstring the timber industry. “Just to harvest trees on our own land, we had to file a harvest plan with the state of California that was an inch-and-a-half to two inches thick,” Mr. Wetsel told The New American. “The state biologists and water resource people could repeatedly change their minds and reinterpret regulations. It’s very time-consuming and costly. A harvest plan for 1,500 acres of our own land quickly jumped from $15,000 to $60,000 — before we even cut a twig.”
Soaring California energy costs and a glut of Canadian lumber driving prices down added to the difficulties of maintaining a competitive business. But the straw that broke the camel’s back was California’s infamous workers’ compensation tax. “When Governor Gray Davis passed his ‘reform’ bill, he said workers’ comp costs would increase 5%,” Mr. Wetsel recalled. “It actually doubled. Our premiums went from $760,000 to $1.5 million annually. It forced us to shut our doors.”
Cecil Wetsel says that he has argued with politicians about the destructive impact of their legislation. “I’ve explained to them that every time you make business less profitable with more regulations and mandates, you destroy jobs,” he says. “American consumers and California consumers need lumber, paper and other wood products, and California has forests that we’re just allowing to burn down rather than properly manage them. I ask them why they won’t let us do our job, why they want to have Canadian companies take all of the business. I don’t know of any Canadian companies that are paying into our Social Security, our Medicare, our income tax, our workers’ comp.”
“The American public understands being over-medicated,” Wetsel told The New American, “but it doesn’t understand the cost of being overregulated.” And one of the major costs of overregulation, he notes, is the loss of American jobs.
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