Beetles Ravaging Mount Rushmore Drain Budgets as U.S. West Warms

Jun 02, 2014 11:08 pm ET

June 3 (Bloomberg) -- Beetles are obliterating forests throughout Colorado and the U.S. West, draining budgets as property values decline and threatening tourism at national parks, including the home of Mount Rushmore.

Voters in Colorado communities raised taxes to protect ski resorts that bring in $3 billion annually to the economy. The pine beetles, each the size of a rice grain, have devoured 25 percent of the woods in South Dakota’s Black Hills, where the mountain with massive carvings of Presidents George Washington, Thomas Jefferson, Abraham Lincoln and Theodore Roosevelt is the linchpin of a $2 billion-a-year tourism industry.

“It’s difficult to stop the spread,” said Bill Smith, a South Dakota Agriculture Department conservation program administrator. “What we’re trying to do is slow it down.”

The beetles’ vast economic impact is emerging two decades into an epidemic fueled by climate change, overstocked forests and drought that wiped out 38,000 square miles -- the size of Indiana and Rhode Island combined. As gray ghost forests dominate vistas in the Rockies, Tetons, Cascades and Sierras, officials from the U.S. Forest Service to state governments are searching for ways to counter the devastation.

“There is always the question, ‘When is the Forest Service going to take all the dead trees away?’” said Catherine Ross, executive director of the Winter Park-Fraser Chamber, 66 miles (100 kilometers) west of Denver. “I talk to them about the enormity of the problem. There are just so many dead trees out there.”

Hotter Insects

Infestation and disease threaten 94 national forest areas in 35 states, U.S. Agriculture Secretary Tom Vilsack said May 20 in Denver. The Forest Service is designating 45 million acres for priority restoration.

Colorado Governor John Hickenlooper, a Democrat seeking re- election, said in a letter to Vilsack that seven of the state’s 13 national forests have “experienced such massive infestation of beetles and other threats to their health they merit designation in their entirety.”

Scientists say climate change is to blame: Winters haven’t been cold enough to reduce beetle populations. The average U.S. temperature has increased as much as 1.9 degrees Fahrenheit (1.06 Celsius) since 1895, with most occurring since 1970, according to the National Climate Assessment issued in May by the Obama administration.

The warming let beetles proliferate at higher elevations and latitudes, and resulted in more generations per year in some areas, according to a 2011 Forest Service report.

County’s Struggle

As a result, lumber mills have closed. Ski areas have leased helicopters to remove dead trees. Dry timber has fed voracious wildfires, reversing a fragile recovery in impoverished areas.

U.S. Senator Michael Bennet, a Colorado Democrat, said in a statement that “the beetle epidemic is decimating our national forests, which are a huge part of our state’s economy and integral to our quality of life.”

Grand County offers a demonstration. It’s the center of an infestation in Bennet’s state that’s wiped out 4.5 million acres of lodge pole pine and spruce, a lost value of more than $1 billion, according to researchers at Colorado State University in Fort Collins. Beetles annihilated 90 percent of the mature lodge pole pine there.

Losing Value

The county’s homeowners are faced with 367 infested trees per lot, on average, a blight that could lower the value of a $429,768 home by $11,000, according to Daniel W. McCollum, an Forest Service economist who co-authored a 2010 study on the beetle’s impacts.

The destruction scars Rocky Mountain National Park with mile after mile of dead wood and discourages activities enjoyed by families for generations. At the 95-year-old C Lazy U Ranch, employees spend hours clearing dead pines off riding trails.

“We have an in-house logging crew -- you are talking millions of dollars,” said Brady Johnson, sales and marketing director at the 11,000-acre Granby retreat. “Trees are falling down nonstop.”

Voters in Grand Lake, a county town of about 470, approved a $4.2 million bond in part to remove as many as 400,000 trees from its 500-acre golf course.

Thirty-seven miles south in Winter Park, voters passed a property tax for beetle treatments. Town officials also contributed to $1.8 million spent by Winter Park Resort to log beetle-kill from 573 acres. The ski area will lay out $160,000 for 70 more acres this year, said Steve Hurlbert, its spokesman.

Industry Impact

The burden doesn’t belong just to government. To protect lines and transmission facilities from fire in its mountainous service area, the Public Service Company of Colorado, a subsidiary of Minneapolis, Minnesota-based Xcel Energy, spent $5.5 million in 2013 to remove trees, according to its annual report.

Some pain is offset by logging jobs, including 1,200 in South Dakota’s Black Hills. Dead timber across 20.3 million acres in 12 western states is available for salvage that could mean money for landowners and governments, according to a 2013 report by researchers at North Carolina State University in Raleigh done at the Forest Service’s behest.

“You could generate some positive net revenue in Idaho, Montana and Washington, Oregon and California,” said Jeff Prestemon, a university research forester and co-author of the paper. “Colorado is a place where you can’t make money doing it. There aren’t enough mills and it’s expensive to harvest because there are a lot of steep slopes.”

Miller’s Tale

Those who hew and cut struggle to stay in business. John Baxter shut down his Saguache mill for the first time in three decades after acres of beetle-kill trees he planned to harvest burned a year ago in the West Fork Complex fire, which cost $33 million to fight.

Sifting chips for animal bedding through his fingers, Baxter said he and his wife cashed in retirement accounts, sold property and eliminated employee health plans to keep their mill afloat.

“We had to lay off six people,” said Baxter, who reopened in April with a fraction of the timber he needs. “A builder in Durango called me and I can’t fulfill his order.”

The fire, which consumed 110,000 acres of beetle-killed spruce, stole a year’s worth of sales for many businesses in a 100-mile radius after tourists were unable to reach the region, said Eric Grossman, mayor of Creede, a town of about 400.

The blaze reversed a tentative economic rebound in the nation’s largest alpine valley, flanked by mountain ranges filled with 14,000-foot peaks, where Johnny Depp visited in 2012 to film “The Lone Ranger.”

“I’ve got a Main Street that’s got a lot of empty storefronts,” said Grossman, who shuttered his own cafe, Jicky Jacks.

“The economy is delicate and a lot of us exist on $20,000 a year,” he said. “It’s a crucial point in the town’s history -- if we don’t turn the corner in the right way, it’s going to impact the town for generations to come.”