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Ketchikan pulp mill closure shocked the community

View of Ketchikan Pulp Co. mill

View of Ketchikan Pulp Co. mill from the water. Date unknown. Photo courtesy U.S. Forest Service Photograph Collection

By Dave Kiffer
Ketchikan – On March 25, 1997, Louisiana Pacific (LP) announced the closure of the Ketchikan Pulp Mill, the primary engine of the Ketchikan economy for more than 40 years. The final bale of pulp – which is now on display at the Southeast Alaska Discovery Center – rolled off the production line that same day.

The announcement was not a complete surprise, given the fact that the financial and political realities of operating a large pulp mill in the Tongass National Forest had changed dramatically in the 1980s and 1990s. Louisiana Pacific itself had estimated that it would take more than $200 million in upgrades to bring the nearly half-century-old facility up to current production and environmental standards.

But, for a community that had hummed year-round for decades on the strength of the timber industry, the closure announcement was a shock to the system.

The closure immediately cost the community 514 year-round jobs and caused a ripple effect that was estimated at least 500 other direct jobs lost. Untold other job losses occurred as retail sales dropped across the spectrum. One of the local shipping companies estimated its revenues dropped 20% in the first month. Ketchikan’s housing market flooded and prices dropped accordingly.

When many of the former millworkers and their families left the community to find jobs elsewhere, the population dipped from a high of nearly 15,000 in the mid 1990s to just about 13,000 in 2003. Local schools were hit harder when the number of school children decreased by 25%.

But even these drops were not as big as had once been predicted. State surveys taken in the late 1980s estimated that Ketchikan would lose more than 35% of its population and half of its school population if the timber industry collapsed. By the time the end came in 1997, the industry had already been retrenching for nearly a decade and, therefore, the blow wasn’t as hard as it could have been.

In announcing the closure, LP also reached an agreement with the federal government over long-standing timber-supply issues. As part of that agreement, the company received $147 million and the right to an additional 300 million board feet of timber for its two remaining sawmills in the region. It was thought at the time that the sawmills could keep the timber industry alive long enough for another long-term timber-harvesting plan to be developed, but by the time that plan – which involved switching from old-growth timber to areas that had already been logged and had grown back – was developed, more than 15 years had passed.

There was also another industry, tourism, that was growing rapidly and would quickly replace timber as the town’s major industry, although many of the tourism jobs would be seasonal rather than year-round, like the pulp mill-related jobs. In a sense, although Ketchikan’s overall economy eventually rebounded, it was now more seasonal, as in the pre-timber past, when mining and fishing were the major industries. In 1996, slightly more than 300,000 cruise visitors came to Ketchikan between April and October. In 2017, that number will top 1 million. This season, it is expected to grow to more than 1.3 million.

Click here for a slide show of the historical Ketchikan pulp mill.

Dave Kiffer is a freelance writer who lives in Ketchikan.

Categories: News