All posts by Aaron Gilland

Forest product theft

A Case Study of Truck Driver Theft

The Situation
 

Marvin Raggins, an independent trucker, contracted with a small wood dealer to provide him with wood. The dealer’s business consisted of providing timber products to several Florida mills under supply agreements. Raggins claimed to have his own source of wood and the wood dealer provided him with authorization cards for delivering the loads to several area mills. Two of the mills were owned by Smurfit Stone and Champion International at Whitehouse. (I know a walk down memory lane for some of us and ancient history to others)!

For more than three years, Raggins provided the wood to various mills using the authorization cards provided by the dealer. However, he also diverted three or more loads each month which was not credited to the logger’s account. Eventually, the logger realized he was losing money and his business was at risk. So the logger began watching things more carefully and eventually became suspicious that timber theft was the cause of his problem.

The incident that closed the case for the logger was easy to track once he started looking. On Friday, Raggins left the job with a load of chip-n-saw (CNS) that he was delivering to Smurfit’s mill. Chip, another driver from the same logging job spotted Raggins delivering the wood to Smurfit and confirmed the drop off. Chip couldn’t tell that, unknown to him, Raggins had delivered the load using the dealer’s s authorization card and not the logger’s authorization card. When questioned by the logger, Raggins couldn’t produce a ticket with the correct information on it. Even after waiting a few days to allow the driver to produce the scale ticket, when Raggins still had no scale ticket and no explanation, he was fired and prosecuted.
A Series of Unfortunate Events

Besides the straight-forward theft issue and the mechanics of how the theft was perpetrated, this case outlines a series of unfortunate events that led to the mill’s inability to see the fraudulent activities. 

1.      Prior to this incident, Raggins had a good reputation as a hard worker and dedicated employee. His father had also worked for the mill in the past and had an outstanding reputation as well. It’s easy to assume that good employees will stay that way. That perception prevented the logger from even attempting to look into the problem. The logger trusted him.

 2.      When Raggins began having trouble with the IRS, he panicked, knowing he had five children and a family to support. As we’ve said before, a change in financial circumstances can prompt a change in ethical behavior. Whether or not the employee carries out the fraud is dependent on his perception of whether or not he can actually get away with it. Raggin’s didn’t think the logger was closely monitoring how many loads were hauled every week. Making it easy to rationalize the theft and begin diverting loads.

3.  At Smurfit Stone, the logger kept a good load sheet and all shipments were tagged with the company’s blue tags. Unfortunately, no reconciliation was performed by the logger or by Smurfit Stone. So all Raggins did was remove the blue tag and deliver the wood as his own. The thefts went undetected.

4.  At Champion mill, drivers were required to sign scale tickets. When Raggins turned in a load for the logger, he signed his full name. When he used the dealer’s authorization cards, he used his initials. The scaler at the time wasn’t alert to the subtle change. Once the company began to match the right dealer and the right scale tickets, they identified over 140 loads of CNS diverted by Raggins to the Whitehouse mill over the three-year period. 

 5.  One of the problems in prosecuting the case was that the logger fired the driver before notifying Smurfit. This made investigation even more difficult and may have weakened the prosecution’s case when it went to trial.
Pulling off the Theft was easy – Lots of people do it!

The investigation of Raggins was led by a corporate security manager who laid it all out for a Florida Department of Law Enforcement investigator. When Raggins was questioned, his response was candid and surprising, “Yep, I did it. I’ve been doing this for a long time. It was easy. Lots of people do it.”

The final verdict sentenced Raggins to restitution, community service and a suspended jail sentence. However, to make matters worse, Raggins ultimately failed to pay restitution and was eventually jailed. When Timber Security personnel tried to track down any assets Raggins owned in an effort to recover its losses, they found he had transferred everything to his wife so there weren’t any assets they could go after.


Moral of the Story

Unfortunately, this isn’t the only case where the practice of “passing out authorization cards” to anyone with a log truck, has resulted in large quantities of wood vanishing from the rightful owners into the bank accounts of the fraudster. This practice is fairly common in most wood procurement basins and in many cases the mills who receive the wood without asking more detailed questions are at best ignoring the problem, and at worst, aiding and abetting the fraudster.

The resulting losses are actually compounded when there is an absence of disciplined control measures within the supply chain.   Because of the nature of small wood dealer’s work, there is little time or resources to develop and implement an appropriate security plan.

This case caused Smurfit to institute a policy of verifying load ledgers and also verifying any new loggers delivering wood to the mill. The on-ground verification of new loggers included verifying their existence while working in the woods. If everyone did this, these kinds of cases could be eliminated or at least greatly reduced.
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Forest Industry Fraud

Forest Activists Block Logging in Freshwater

On February 21, 2023, an anti-logging activist suspended himself via nets and rope in a contraption called a sky pod in a thicket of trees in Freshwater, California, to prevent Humboldt Redwood Company from cutting down trees on their property. 

The protestors contend the huge trees in the area are becoming increasingly rare and represent a dwindling number of intact forests in the US. This is only one of several anti-logging demonstrations that have taken place in Humboldt County history. 

 The activist, Aristotle, also began a hunger strike to protest the planned logging and said via a news release from Lost Coast Forest Action that he was taking supplements that would allow him to live without food for months. His location brought logging in the area to a halt. 

 Aristotle contended the area being logged contains massive redwood and Douglas fir trees that are providing critical habitat to many endangered animals in the area.

 Aristotle added that he was acting in honor of another forest activist, Manuel Esteban Paez Teran, who was fatally shot by police in Atlanta. That story follows below, but it indicates how social issues in one context can impact others motivations. 

A spokesperson for Humboldt Redwood Company claimed the harvest plan covers approximately 1% of the Freshwater watershed and would not affect nearby threatened species. The harvest plan was approved by multiple state agencies. Humboldt contends the logging will also create a more wildfire-resilient forest by reducing the number of second and third-growth trees in the harvest area and protecting all old growth. 

On March 20, 2023, activists vandalized three pieces of equipment (a yarder, log loader and bulldozer) owned and operated by Steve Will’s Trucking and Logging. This occurred at the same time the “tree sitting protest” was occurring on Humboldt property. 

Steve Will said, “Every electrical line was cut, every hydraulic line was cut, battery cables were cut, and other damage was also done.” Gasoline was poured in the cab of one of the pieces of equipment and a lighter was found nearby, but no fire was every started. A fire extinguisher was removed from the cab of one of the pieces of logging equipment and set off inside the engine of that machine. Air cleaners, fuel tanks, and hydraulic tanks were filled with dirt and debris. The windshield wipers were broken, and valve stems were removed from several tires. 

The vandals left warnings, spray painted on the machines, cautioning that damage had been done. Damage is estimated at around $100,000. Humboldt contends the vandals crossed the line here. This is no longer peaceful protest. 
Protesting “Cop City” in Atlanta
Dozens of people were arrested in Atlanta after rocks, fireworks, and Molotov cocktails were thrown at officers near a construction site for a planned public safety training center. The debate about the training center has been ongoing. It is planned to be used for specialized training for both law enforcement and fire department service workers. 

The nickname “Cop City” is the name given for the facility by its critics. 

According to the center’s website, the center will include an auditorium for police/fire and public use, a “mock city” for burn building training and urban police training, an Emergency Vehicle Operator Course for emergency vehicle driver training, a K-9 unit kennel and training. The first phase is scheduled to open in 2023.

 There are three sets of protestors. ·    

    One group is protesting the purpose of the training facility in general. City officials claim the center could improve policing, while critics claim the effort is militarizing police and endangering communities and marginalized people. The first defenders moved into the forest nearly two years ago. They set up camp in trees and attempts by authorities to clear the camps have met with resistance. Authorities arrested six people on January 21 when demonstrations, which started peacefully, escalated to involve shooting fireworks at police, smashing windows and igniting a police cruiser. “The forest is the heart of it all,” says one of the activists. ·    

    Another group is protesting two specific incidents by police. The first was directly related to Cop City. It centered on the death of Manuel Esteban Paez Teran (also known as Tortuguita), a Venezuelan environmental activist and non-binary eco-anarchist who was shot and killed by a Georgia State Patrol trooper as they raided the campground occupied by demonstrators on January 18, 2023. During the altercation, officials say Tortuguita fired at a state trooper, and the officer responded with the fatal shot. Some believe the officer was wounded by friendly fire. There is no body camera footage of the incident. Investigations are ongoing. 

Georgia Governor Brian Kemp declared a state of emergency on January 26 in response to ongoing protests in downtown Atlanta relating to Cop City. In a related event not directly connected with Cop City, however, Atlanta braced for more protests against the facility, as well as potential unrest city-wide following the release of body camera footage of the alleged beating of Tyre Nichols by five Memphis, Tennessee police officers. The officers have since been fired and charged with murder in his death. The incident sparked anger about police methods and Cop City became a symbolic target. Kemp mobilized up to 1,000 state National Guard troops to be called up to active duty “as needed.” ·    

    A third group in the conflict are those who argue that the center will impact forests which are a vital part of the community. Atlanta has one of the highest percentages of tree canopy in any major US city, according to environmental advocacy group Trees Atlanta. Furthermore, it is home to wetlands and important migration sites for birds. 

The center is expected to cost $90 million and take up over 85 acres. The total acreage for the land includes an additional 265 acres that will serve as greenspace. For some, this is just the first step that could potentially impact a much larger forest in Atlanta. 

Americans have debated for years where to draw the line between law and order and the right to confront authority. Now, protestors in Atlanta have been charged with terrorism, laying down a new marker in the debate. To many Americans, it’s a long overdue step to take a firmer stand against political unrest and violence. But to others, the move speaks to a dangerous push to silence dissent and criminalize protest. 

The charges in Atlanta come amid a growth in political violence in the US. All but eight US states experienced at least one incident of domestic terrorism between 2010 and 2021, according to the Government Accountability Office. The phenomenon has grown by 357% since 2013.

 In either case, those who are in the forestry business need to remember that our workplace, the forest, continues to be a battleground between ideologies and strong political and social leanings that can put us in the middle of conflict and violence we never wanted. Caution is called for. It is best to make plans now about how to deal with such a situation, just in case.

 After all, every emergency sufficiently prepared for, seldom happens! 
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Forest Industry Fraud

I’m not lying, I’m advertising

Greetings!
Christopher Dillard of Dillard Timber LLC advertised his logging and timber services to North Carolina customers. The company owned no logging equipment, had no employees and Dillard himself didn’t log or mill timber. Dillard worked differently. His business model was to get the customer orders and then find a third party to do the actual work.

His mistake came when he advertised that Dillard Timber LLC actually performed certain timber services when they did not. A quick Google search, brought me to a very sparse website for Dillard Timber LLC that primarily consists of a short advertisement on the first page and then links to contact information. The home page of the cite reads “We Buy the Timber and Do All The Rest For You! You don’t even have to move a finger! (Except to accept the check)”

When things went well, customers would probably not notice or care about the arrangement with the subcontractors. Customers would take notice only if they received poor quality work or never received the services promised. 

Dillard’s business model led to allegations of unfair and deceptive advertising. In order to make a profit from his role as “middle-man,” Dillard created the impression that he was paying fair prices for the timber when he was actually paying well below market rates. The companies he contracted with to do the work received fair market rates, but he took his cut before passing the rest onto the customers. 

There are some other interesting angles about this case that go beyond simply providing poor customer service and a questionable business model, however.

To start, the case was brought to court by the Attorney General of the State of North Carolina rather than the customers who were personally harmed by this arrangement. It was unwise for Dillard to assume that the cost of going to court would prevent any legal action.

Another obligation of legal businesses is to protect themselves against legal complaints. Dillard failed to follow the appropriate legal procedures which severely swayed the decision in favor of the State.

The case also leaves open the question about the legality of the company’s existence. Dillard Timber is listed as an LLC and when operated properly an LLC prevents legal action against the individuals assets. We are not told, but I suspect that Dillard thought the LLC (Limited Liability Corporation) designation would prevent serious financial losses, since he had no assets in the business. The article says he was not registered to do business in North Carolina, which I take to mean his company wasn’t registered with the Secretary of State in NC. Any businesses should be aware of registration requirements within thier operating areas. Dillard now cannot do business in the entire state (under his own name).

Read below for more details about the case and the judgement or go to (https://ncdoj.gov/wp-content/uploads/2023/01/doc05665420230125152033.pdf) to get a copy of the judgment itself.

As always,
Aaron


Court Wins Claim Against Dillard Timber, LLC




On March 17, 2022, Attorney General Joshua H. Stein, acting pursuant to authority granted in Chapters 75 and 114 of the North Carolina General Statutes, filed a complaint against Christopher Dillard of Lumberton, NC. It was filed against Dillard personally because his business, Dillard Timber LLC, was not registered with the state of North Carolina.


Throughout the proceedings, Dillard failed to file or serve an answer or plead his case to the Complaint within the time required by law, which did not help his case.


On April 27, 2022, the plaintiff (Stein and the State of North Carolina) filed and served a motion for entry of default against Dillard. The next day, default was entered and on May 3, 2022, Dillard was served a copy of the Entry of Default. Then on December 13, 2022, Stein filed and served a Motion for Judgment by Default, as Dillard continued to fail to provide a written response stating his case for opposing the complaint.


Therefore, the court proceeded without Dillard’s representation of his case and final judgment was made January 31, 2023. 


The prosecution’s case included the following complaints against Dillard:
Failure to respond.
Engagement in unfair and deceptive acts and practices which affected commerce.
Actions taken were done knowingly and willingly.
Actions caused financial harm to others. The case cited losses to Herman Rodger and Mary Alice Hall in the amount of $5,368.06.
Engagement in unfair and deceptive acts or practices over a long period of time (2017-2021).
Failure to take action to reimburse his victims for their financial losses.


In his advertising, Dillard, as owner and operator of Dillard Timber, LLC, claimed that his company performed logging, milling and other timber services. He also claimed that he would pay top prices for their timber when he actually used a non-standard unit of measurement in his contracts to create the impression that he was paying fair prices for timber. He was paying well below market rates.


In some cases, Dillard was also accused of failing to complete the timber services promised. He was also accused of failing to pay for ALL the timber harvested. Finally, he then failed to respond to complaints from customers.
In the end, Dillard paid the money owed the Halls and an additional $5,000 for civil penalties to the State of North Carolina for prosecuting the case.
Additionally, Dillard and Dillard Timber, LLC are permanently banned from operating a timber business in North Carolina. 


Some Lessons Learned

When buying services from any business it is important to ensure they are a legitimate company that can make good on its promises. Just because the company has a website and a logo and puts LLC behind the name, doesn’t necessarily mean it is legitimate. Get references!

Know what you are paying for. Tangible goods can be seen and valued more easily than services. Make sure the service that is being delivered is what you intended. We talk a lot about contracts in this newsletter. They are the best way to keep everyone honest and actually protect both the buyer and seller from misunderstandings or unclear expectations.

Avoid Bait-and-Switch ads and websites. These lure people in with a specific promise or offer, but then change what you actually get once you try to claim the offer.

Check for details. Every quality ad will have all the details the consumer needs in order to know what they are purchasing. There should at least be a link to a website where there will be detailed information about the goods and services offered.

Even though remediation was relatively small as in this case, it is worth taking action to get your money back and to ensure others are not also being taken advantage of in the same way. This is especially true for individuals and small companies.

Let authorities know that you have been swindled. You may get support from places you never expected. Politicians are looking for votes and helping out citizens can often do that for them.
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Forest Industry Fraud, Forest product theft, Fraud

Caught Three Times

Greetings!

I have talked frequently in this newsletter about the unique challenges of landowners trying to not only find a source for harvesting their timber, but more importantly finding one that is ethical and will do the work as agreed and pays per the contract agreement.

Your woodland is a considerable financial investment and a source of personal enjoyment and satisfaction. Years of growth can be derailed in a few days when you hire a logging company that does a poor job. A poor job being damaging residual stands, cutting trees outside the contract, damaging roads, underpayment and even a refusal to pay for harvested timber.

The story below is about a logger who had three counts of failure to pay in the past six months alone. Those were just the ones identified. There’s no telling if there are others who have just not come forward for whatever reason.

Selecting a good contractor is a serious issue. I can’t caution enough about the importance of making sure the logging company you select has integrity and competence. Below I’ll share some tips from the American Forest Foundation (Hiring a Logger) for you to consider when looking for a logging company.

Read on to learn about James Travis Johnson. His thefts are relatively small but that is typical for most timber thefts. They don’t just steal once. In the end there have been several victims. I don’t know about you, but even small amounts of theft aggravate me!

While you are reading, consider how you can make sure you don’t become a landowner without the trees or the money you should have earned from the harvest.

As always,

Aaron
Vernon Paris Man Arrested for Timber Theft


History certainly seems to repeat itself in this case. The first account in this case is when 48-year-old James Travis Johnson was arrested by the Louisiana Department of Agriculture and Forestry’s Enforcement agents and booked into the Vernon Parish Detention Center on Timber Theft and other timber-related charges on August 9, 2022.

Later that day he was arrested in Rapides Parish on additional timber theft charges.

Weeks before following an investigation, the Louisiana Department of Agriculture and Forestry ‘s Enforcement agents (LDAF) received a complaint that Johnson failed to pay for loads of timber valued at $1,860.74.

 If convicted, Johnson could receive a fine of up to $5,000 and/or jail time up to five years for the timber theft and up to $1000 in fines and/or up to one year in jail for the false statement.

Two days later, on August 11, Johnson was arrested again for two additional counts of timber theft. Again, LDAF Forestry Enforcement agents received complaints from two separate landowners who each owned four-acre tracts of timberland in the area.
In the first complaint the landowner told authorities that Johnson harvested the timber per their agreement but never paid the landowner. In the second complaint, the logger cut a tract of timber without the consent of the landowner.

As far as I can tell, the case has not yet been to trial .Then, three months later, in November 2022, a landowner accused James Travis Johnson of completing a harvest, without making any payments to the landowner. The landowner was owed $24,407.65 for the timber. Johnson was charged with one count of Harvest of Forest Products/Failure to Remit Payment. Although he was contacted several times, he would promise payment and then not show up. Finally, he surrendered himself at the Vernon Parish Sheriff’s Office on the one count of failing to pay. Bond of $20,000 was paid and Johns was released on the same day.
Finding Good Loggers

Choosing the best timber harvesting company or logger for your land can be a daunting process. There are many professional loggers with integrity and will pay on time and accurately. It is important to invest the necessary time and resources to make sure you find one that is ethical and trustworthy.

Thanks to the American Forest Foundation, here are a few tips to do that:

*Go by word of mouth. Ask your consulting forester or your states forestry organizations to refer a logger or ask your fellow woodland owners.

*Check Qualifications. Do they have any training or certifications? Most professional loggers will be participating in logger training and certification programs. These programs are not mandated but continuing education participation contributes to professionalism.

*Check References. If you don’t know of anyone who has used the company, ask them to give you references. Specifically ask about the condition of the trees that were not harvested and the condition of the surrounding land and soil. Consider visiting a site the logger had harvested.

*Insurance/Liability. Request copies of certificates of insurance such as general liability, auto liability for log truckers, workers’ compensation. If the logger doesn’t have insurance, you could be held personally liable for any accidents on your property.

*Multiple bids. Get at least three bids based on the clear scope of the work. Clearly mark the trees you want cut.

*Negotiate prices. Check stumpage prices (the price offered by a logger for your trees as they stand in the forest) offered for similar timber listed with published sources or call local mills directly for the most up-to-date market prices. Understand if the prices include accessibility, timber quality, road distances, market demand, sale volume, species, etc. to make sure you are comparing apples to apples.

*Sign a contract. Clearly lay out what the logger will do, e.g., which trees to cut, what clean-up will be done, how damage from heavy equipment will be minimized, and payment amounts and time frames.

* And if after you consider all of these data points, you may find yourself in need of a good consulting forester check with the Association of Consulting Foresters to find a forester near you. (this last bullet point is my opinion and was not part of the tips provided by the American Forest Foundation).
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International Trade

Global Crackdown: Operation Thunder 2022

Greetings!
Greetings!

I’m continuing my international theme this month with a look at a multi-national, cooperative effort by INTERPOL and World Customs Organization (WCO) with the intent of disrupting the wildlife and timber crime trade.

In a December 7, 2022, article by industry Intelligence Inc. (http://www.industryintel.com), the APO Group on behalf of INTERPOL shared some interesting information about a one-month global crackdown on illegal wildlife and timber trade. INTERPOL and World Customs Organization (WCO) joined forces in October 2022 to enact hundreds of arrests. Their intent was to disrupt the wildlife and timber crime networks working globally.

The operation is codenamed “Thunder 2022.” It brought together police, customs, financial intelligence units, wildlife and forestry enforcement agencies from 125 countries. These types of world operations began in 2017, but this is by far the largest number of countries participating. 

Results are still being reported. The total impact may never be fully known as it is difficult if not impossible to ascertain the impact of these actions as a deterrent from future such illegal activities. As of December 2022, Operation Thunder has performed almost 2,200 seizures and the identification of 934 suspects. In addition, agents identified 141 companies suspected of engaging in illegal sales and worldwide seizures of protected animals and plants.

As always,
Aaron
Results of Operation Thunder 2022

Searches were conducted focusing on illegally traded species protected by national legislation or the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES is an agreement between governments that regulates the international trade of wildlife and wildlife products. It includes everything from live animals and plants to food, leather goods, and trinkets. also known as the Washington Convention. The Checklist of CITES species allows the exploration of more than 36,000 species of animals and plants and their degree of protection.

The Thunder operation focused on utilizing preventive measures already in place. Through routine inspections and targeted controls, law enforcement officers inspected hundreds of parcels, suitcases, vehicles, boats and cargo transporters. Oftentimes, they used sniffer dogs and X-ray scanners to support their efforts. Searches were conducted at land and air border checkpoints.

So far, seizures of protected animals and plants include:

  • Wildlife: 119 big cats and other felines, 34 primates, 136 primate body parts, 25 rhino horns, 9 pangolins, 750 birds, 1,795 reptiles, 1, 190 turtles and tortoises, as well as tons of various animal and bird parts, such as elephant ivory.
  • Plants and timber: Timber seizures include Rosewood, Cacti, orchids, etc.

In Southern Africa, Namibian authorities intercepted large amounts of timber before they were smuggled into the region. Angola arrested a citizen of the Asian region attempting to return to the region with rhino horns and ivory ornaments. Malawi authorities seized elephant tusks at the home of a man with Asian citizenship.

In Asia, Thailand reported seizures of tortoises from East Africa and hundreds of live reptiles from Europe. Indonesia seized timber bound for the Middle East and Asia. India seized 1,200 reptiles (iguanas, pythons, monitor lizards, and tortoises) declared as “ornamental fish” and packed in cardboard boxes.

Europe has become a growing destination for protected wildlife. France intercepted reptiles from Central Africa hidden in luggage, Germany intercepted tiger skin amulets in a parcel from Asia and the UK seized several ivory pieces after investigating a man selling wildlife through an e-commerce site.

In the US, several international airports seized parrots, iguana eggs, coral, crocodile leather products, caviar and shark meat.

These are just a few of the reported items seized. It shows the robust and widespread nature of illegal international trade. With that understanding, it is easy to see the importance of having the type of global cooperation seen in Thunder 2022. Without that, any country’s individual efforts would be quickly thwarted. Large scale cross-border operations are the only weapon against transnational criminal networks. Customs administrations can refine their risk management strategies. Multi-stakeholder cooperation can tackle the full range of the trafficking cycle – from detection to seizure to arrest to prosecution. By sharing trafficking intelligence, both ahead and during operations, field officers can

More Than Just Conservation

Thunder operations are important to global security because timber and wildlife trafficking are not just conservation issues. For the communities and countries where illegal trafficking occurs, livelihoods are destroyed, diseases are spread, governments weakened, and entire economies destroyed. The lucrative financial gains that illegal trade offers, attracts serious organized crime and terrorist militants.

Operations like Thunder 2022 not only put criminals behind bars, but also protects the personal lives and global economic systems. In addition, it raises public awareness about what species or products people can or cannot buy, sell, or take from the wild.

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Forest Industry Fraud

Energy Crisis in Europe: Firewood Becomes the New Gold

This month I’m taking a little different twist on timber security by looking at theft, but also at global conditions that could have a dramatic impact on the timber industry as a whole for many years to come. This is not the first time that a wood crisis in one part of the world had a great impact beyond the immediate area. It was not that long ago that a wood shortage in Japan brought floating sawmills to the US Northwest to meet the emergency need.

The current situation in Europe could have the same impact on the US and global supply chains. When there are shortages in any product or resource, there are thieves who either take advantage of the situation or steal to meet personal needs.

This month we take a look at the wood shortage situation in Europe. We’ll first try to get a sense of the extent of the problem and how ordinary people and especially the poor are most adversely affected by the energy crisis just as winter moves into the area.

Once we get an idea of the lives of energy consumers, we’ll look at some of the complex issues raised in Europe that got them there.

Hope you find it all enlightening. It might also be a good time to try to read our crystal balls to see how this could eventually affect the US timber industry.

As always,
Aaron


Throughout Europe energy prices are spiraling out of control.As a result, many Europeans resort to firewood to keep themselves warm as the winter months have already arrived in many parts of the continent. People are venturing into the forests to cut down their own fuel and those trees are on public and private land.

Gas and electricity prices have risen dramatically placing average citizens in jeopardy while temperatures drop.

As a result, many citizens are looking to wood as a heat source this winter, but even obtaining wood for fuel has become a problem. In Bulgaria, which relies heavily on wood burning for most households, prices have doubled. Local media reports from Poland last month asserted that prices of firewood have already doubled this year. The Telegraph reported in August that firewood sales in the UK have increased five-fold.

Some desperate residents are burning household garbage to stay warm.

Furthermore, prices for wood pellets has nearly doubled according to a Bloomberg report. In July, the EU also banned the import of Russian wood and pellets.

The spiking prices are felt most by the poorest, especially those in Central and Eastern Europe where low-income households tend to be more reliant on firewood than gas.In anticipation of a wood shortage, timber theft is quickly rising as gas and electricity become increasingly un-affordable for ordinary Europeans. In spite of tighter controls by Forestry departments, forest owners find the thefts are getting more frequent and more brazen.

The story is the same across the continent. Firewood prices are soaring, warehouses have filled their waiting lists until next year, and there are growing concerns this situation will lead to major environmental problems.

Some government agencies have expressed concerns about the illegal logging, but others have chosen to turn a blind eye to the problem. In those cases, the government has even encouraged citizens to burn whatever they can, unless it is harmful, like tires.

This tug of war between the needs of the people for survival and the government and property owners’ needs to prevent theft and protect forests and property will only get worse.

With Russian energy imports dwindling, Europeans pray for a mild winter and European policymakers pray they can avoid energy rationing.

The impact is pervasive. It affects not only the citizens’ well-being, but the economy, the environment, and the dwindling oil and gas supply is slowing down the Continent’s economy and crippling industrial production. Germany, Europe’s largest economy is heading for a recession. 

Why is There an Energy Crisis in Europe?



While ordinary Europeans are looking for solutions and help today, policymakers are seeking long-term solutions to ensure reliable fuel sources for many years to come.
The reasons behind Europe’s problems are far from straightforward and illustrate how complex and interconnected the global energy market is. The interdependence of world markets affects economies, prices, and efforts to meet a variety of energy-related challenges. Add to that the push by world governments to remove traditional heat sources and rely on “green energy” and you can begin to see how big a problem we may all see in the near future.

In an article from the World Economic Forum, published on October 13, 2021, here are five things to know about Europe and its energy.

1. Global demand is recovering strongly after the worldwide pandemic.In 2020, demand for natural gas fell by 1.9%. That was partly because of change in energy use during the worst periods of pandemic disruption. But it was also the result of a mild winter in the northern hemisphere. Since then, demand is rebounding throughout 2021 and global gas consumption could have grown 7% higher than pre-pandemic levels by 2024. Some of this is also a result of a major switch from coal to gas. Even though gas consumption is expected to slow, the government may need to legislate to ensure a smooth transition.

2. Europe is reliant on gas imports

European gas production is in decline. Several North Sea gas deposits are running dry, as are a number of gas fields in the Netherlands. This leaves Europe increasingly dependent on gas imports, primarily from Russia and Norway. This could be an opportunity for Russia to underscore its credentials as a reliable supplier to the European market, but instead its exports are down from their 2019 level.

3. Prices are high and could go higher

There has been a 600% increase in European gas prices so far in 2021. Although governments are seeking ways to provide help against spiraling costs, the exposure to volatile global gas prices underscores the importance of building a strong, home-grown renewable energy sector to further reduce the reliance on fossil fuels.

4. Winter is coming – again

The problem of low gas stocks is only part of the problem. Chartering ships to transport LNG around the world has been affected by a lack of shipping capacity, making responses to spikes in demand both difficult and expensive. Vessel charter rates have also spiked.

5. The energy transition: it’s complicated

Gas burns cleaner than oil or coal. It is used widely as a substitute for both in the production of electricity. Although it is playing a role in helping decarbonize electricity generation, gas is still a source of greenhouse gas emissions. The International Energy Agency (IEA) predicts a 9% increase in annual gas demand between 2020 and 2024. That is significantly higher than the demand growth that would need to be maintained to stay in line with the target of net-zero emissions by 2070.

In the meantime, Europeans are fighting for reliable and affordable heat during the winter months right now. They can’t wait for a global solution. So, they turn to wood as an immediate source of energy and access for most people is only available by stealing what they can find. Their family depends on it.
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