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Updated Sep 13, 2013 - 6:46 pm

Contract for Arizona thinning project transferred

FLAGSTAFF, Ariz. -- A massive thinning project in northern Arizona's forests is now in the hands of another contractor that plans to use the harvested trees to produce wood pellets, furniture and biodiesel fuel, officials said Friday.

Pioneer Forest Products was selected in 2012 to thin 300,000 acres in four Arizona forests over 10 years. But the Montana-based company had trouble with financing and talked to the U.S. Forest Service earlier this year about transferring its contract.

The Forest Service on Friday announced the approval of a transfer to Good Earth Power AZ LLC., whose parent company in Oman primarily does work outside the U.S. Forest officials said they determined that Good Earth is financially and technically sound to carry out the work.

The stewardship contract that the Forest Service has called the largest in its history is meant to restore a 2.4 million-acre area along the Mogollon Rim to reduce wildfire risks and create sustainable forest industries.

The Forest Service has acknowledged the project is behind schedule. An order to treat about 930 acres on the Apache Sitgreaves National Forest is expected to wrap up soon. Four other task orders covering about 5,700 acres on the Apache Sitgreaves and Kaibab forests were issued this week.

Conservationists, scientists, timber industry representatives, and local and forest officials worked together to shape the project known as 4FRI. Already, some are raising concerns about the new contractor and its business plan that includes logging large-diameter trees.

Kaibab National Forest supervisor Mike Williams said most of the thinning will involve small-diameter trees, but there will be a need to create openings in the forest by removing trees that are larger than 16 inches in diameter.

Environmental groups have been fighting against that in court since the early 1990s.

``They're forcing us to go back into the trenches to protect the last of the large trees,'' said Robin Silver, co-founder of the Center for Biological Diversity. ``I can't imagine how you would work harder to destroy 4FRI but to pick another contractor with no experience and now focused on large trees. Bummer.''

Good Earth global chief executive Jason Rosamond said the company has no experience with forest restoration in the Southwest but has brought on an undisclosed forest management company that does. Good Earth also retained Pioneer employee Marlin Johnson, who previously has worked for the Forest Service.

The company's plan is to work with local mills and invest in some of them so they have the capacity to take the harvested products. Rosamond said Good Earth also will invest in about 20 pellet mills scattered throughout the project area and ship the product overseas. A $50 million mill in Winslow and a power plant to produce synthetic gas that can be converted into biodiesel and jet fuel are part of the company's plans.

Rosamond said the conversion technology hasn't been tested on a large scale, but ``we're confident we're going to get it right.'' The financially viability of the project isn't dependent on it, he said.

Navajo County Supervisor David Tenney said he and other local leaders plan to meet with Good Earth on Monday to discuss the company's business plan- something he said they could not get Pioneer to agree to. He said he's encouraged that Good Earth appears to have solid financing.

``I just want the forest treated. I've been calling on the Forest Service to issue the task orders and hold their contractor responsible,'' he said. ``This seems to be a step in the right direction.''

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