The bigger the mine, the better the deal

  • Tim Blixseth of Big Sky Lumber

    The Oregonian

BOZEMAN, Mont. - The way things are going around here lately, we should change Montana's nickname from the Big Sky Country to the Big Swap Country: Let's make a deal!

No doubt it's a form of progress. So were the 1872 Mining Law and the railroad land grants in their day. But qualifiers need to be voiced.

The latest swap was unveiled a few weeks ago to international fanfare: A mining company agrees not to dam 11 million tons of toxic slurry in an earthquake zone upstream from the Yellowstone National Park ecosystem. In return, all of us (in the form of the federal government) give the mining company $65 million or so worth of public land and other public property.

Yes, it's a better deal for the public, now and forever, than if the mine went ahead and installed a permanent threat to the region's matchless rivers merely to produce some gold trinkets.

And yes, it allows President Bill Clinton to helicopter dramatically to the mine site and then add a line to his campaign speeches around the nation, advertising his role in the deal and claiming some green credentials just before the election.

Behind the celebration, though, the Mining Law of 1872 stands pat, allowing lots of other risky mines to proceed, and inviting the same kind of leveraged swap-out to happen anywhere in the West again and again.

A precedent has been set: Whoever comes up with the most monstrous mining proposal gets the best deal. Actually, the precedent had already been set by a string of previous big land swaps around here. They were required not by the antique mining law, but by the antique railroad land grants that began in the 1860s.

In a sense, the railroad grants were the biggest swap ever: We gave the railroad more than 60,000 square-mile sections, and in return, track got laid across the Northwest. The national forests along the railroad track were born after the track, and born crippled: perforated mile after mile by the sections of private land. The pattern was named by the land-swappers, who think in terms of strategy, as the checkerboard.

Some of Montana's national forests, including the Gallatin around Bozeman, have been among the most checkerboarded lands in the West. Yellowstone National Park, also a newcomer compared to the railroad, had to dodge back and forth along a row of the checkerboard. Touted as such a good idea, the checkerboard became an administrative nightmare for all involved. Private development and public use were equally difficult.

So from the 1920s on, the government and private landowners have been retiring portions of the checkerboard by swapping squares. The government consolidated the park, Forest Service wilderness and Bozeman city watershed. Private landowners knew what to hold out for: they consolidated more than 100 square miles around the Big Sky ski resort.

That's how land-swapping works; for every plus, there's a minus. It is not an exact science, based as it is on appraisals of assorted valleys, streams, lakes and peaks, none of which are comparable. The appraisers also leave out much of what's important - stuff like wolverine pawprints and wind song through pines. So even if things went well, there would be problems. But they don't go well.

Around here the Forest Service has made some costly mistakes. When the Big Sky resort was started in the early 1970s, the Forest Service swapped away land in the resort area at appraised values of as little as $25 an acre because the regional forester had decided that the land had "no prime recreational" value. Twenty-five years later, as Big Sky goes through Aspenization, an acre in the resort area sells for up to $5 million.

Every day it gets easier to foretell the future. Any square mile of the Gallatin forest not taken over by the government will soon sprout micro-chipped cabins, gated neighborhoods, possibly more ticket-taking grizzly zoos.

There was an opportunity to end land-swapping in the Gallatin four years ago. The railroad's descendant, Plum Creek Timber, decided to sell off everything it still held here. Plum Creek was all about logging, and it didn't relate to what the Gallatin has become: Montana's most popular forest for recreation and real estate. So Plum Creek put more than 250 square miles up for sale - all the rest of the local checkerboard.

The Nature Conservancy negotiated to buy it all for something like $25 million, planning to spin off a green nonprofit corporation, a model for preserving jobs by milling trees from an eco-friendly harvest. Ted Turner, the local billionaire, pledged $10 million, interest-free, to back the Conservancy. In the end, the timber beasts couldn't come to terms with the tree-huggers and vice versa.

Instead, a partnership of speculators from Oregon swooped in and bought almost all the old railroad land. The speculators, doing business as Big Sky Lumber, are now multiplying their investment in a complicated series of more swaps and outright sales of some of the former public land back to the public.

It's the same kind of threat as with a gold mine on the park's fringe. Right away, Big Sky Lumber subdivided 10 square miles of critical habitat in the Porcupine drainage and threatened to sell lots to anyone who came along. That caused the Forest Service to declare that the top priority nationwide was to buy or to swap out Big Sky Lumber's lands.

In increments for three years running, more than $16 million has been spent by Congress, with state and Rocky Mountain Elk Foundation involvement, to buy back the Porcupine and the Cottonwood drainage - dubbed Bozeman's "pocket wilderness."

The second stage would swap $40 million to $50 million in public cash, timber rights and assorted public land around Montana for as much as 100 square miles of the Big Sky Lumber checkerboard here. In the process, Big Sky Lumber would be making something like $75 million on its reported investment of $26 million. When the swapping dust settled, Big Sky Lumber would still hold 75 square miles in solid blocks in the Gallatin, including more than 30 square miles in Big Sky and another 35 square miles near the Bridger ski area, worth at least another $50 million to $100 million.

Big Sky Lumber knows how to work the system. It cuts the trees on a square, and then swaps it to the public for another square that can be logged and swapped back or sold.

Asked how he'd like to be portrayed, Tim Blixseth, the front man for Big Sky Lumber, says, "A poor kid who was raised on welfare, who is still one of the little guys (at heart) - I can go into a cowboy bar with my T-shirt and boots on and be as accepted as the next guy."

In a new kind of range war, Ted Turner, who wanted to retire the checkerboard without making a profit off the taxpayers, has blasted Blixseth, saying, "I've made my money by creating things, not by sticking somebody." But Forest Service and environmentalist negotiators trying to accomplish the Big Sky Lumber swaps speak only praise of Blixseth. They say his word can be trusted and they don't criticize him for profiteering. It's a new language: consensus-ese.

The swaps with Big Sky Lumber enjoy the support of just about every environmentalist, politician, local government and business, because there doesn't seem to be any alternative, and what's being swapped away is usually imaginary money (from the federal Land and Water Conservation Fund budget) and imaginary squares (land in somebody else's back yard). As the region continues to fill in and the inevitable developments rise in a lot of back yards, though, the swaps will no longer seem painless.

The Gallatin forest is merely the first to go through the expensive process of big swaps and consolidation. Other checkerboarded Montana forests are said to be proceeding in the same direction: Plum Creek Timber is getting set to offer up 80 square-mile sections in the Kootenai, and maybe more than 300 square miles in the Flathead and Swan River country of Montana.

It's an ongoing emergency. Every day of delay means the appraised values of the checkerboard squares will rise, so that more public land and cash will have to be offered in exchange.

There are only so many multimillion-dollar packages of choice public land available for swapping, and we may run short of inventory to pull off all the forest swaps. Such is the context for the celebration of the mine swap last month.

Ray Ring writes in Bozeman, Montana.

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