WOOD-CHIP MILLS FACE NEW RULES

Canal Industries Inc. has no problem with Gov. Mel Carnahan's executive order concerning the wood-chip industry.

"Typically, we don't make our records public," said Fran Gilbert, senior vice president of Canal Industries, which has operations in 15 states. "But if this is what it takes, we'll abide by the governor's decision."

In December Carnahan, responding to concerns expressed to his office, appointed a special advisory committee that includes four directors of state agencies to study overall effects of the chip-mill industry on state forest.

The committee's report is due at the end of the year.

The governor also issued an executive order in December that requires chip mills seeking state permits to keep records on where trees they buy from independent loggers are harvested.

Canal Industries, headquartered in Charlotte, N.C., last year opened a $12 million chip mill on 40 acres at the Southeast Missouri Regional Port on the Mississippi River near Scott City.

Carnahan also prohibited state agencies from offering new economic incentives to develop or expand chip mills in the state and set other conditions on issuing or renewing state permits to existing mills.

"We'll monitor the activities of the advisory committee," said Gilbert. "We're in support of healthy forest products."

Canal Industries, which has been in business more than 60 years, requires all its contract loggers to receive logger training, said Gilbert. "We encourage loggers to use the best management procedures," he said.

Carnahan's actions came to the front recently during a public hearing at Rolla conducted by the Missouri Department of Natural Resources. The hearing concerned a new stormwater discharge permit request by Willamette Industries, a chip mill headquartered in Portland, Ore. Willamette had applied for the permit for its Mill Spring, Mo., chip mill, a $10 million operation that opened more than a year ago.

A Willamette official told the hearing the company operates in 23 states, and no other state has required it to present records on the origin of wood it buys for chipping.

Willamette and Canal are major chip-mill operators. The companies each have the capacity to produce 300,000 tons of chips a year and consume up to 55 truck loads of wood a day in Southeast Missouri.

Chip-mill operations have created concern among both urban and rural residents. Some people see them as leading to the destruction of the state's forests.

Others see chip mills in the same light as paper mills, which emit unpleasant odors over a wide area. Chip-mill officials point out there is no need for odor concern, because chip mills don't create pulp and paper; they take whole wood and chip it.

Chip-mill proponents say the mills use low-value trees and sawmill wastes and provide jobs in rural communities. They say they also use the tops of trees that logging companies leave behind and timber from road expansion projects.

Many private forest-land owners find themselves in the middle of the controversy. Eighty-five percent of the state's forests are owned by private landowners, and the mills depend upon the landowners to supply some of their wood.