RENO (AP) - Logging of national forests costs U.S. taxpayers hundreds of millions of dollars a year, according to one new estimate, as federal land managers try to marry a century old program that produced lumber to one that squeezes out relatively few products while waging a war on wildfires.

Subsidization of logging continues to grow because congressional spending on the Forest Service program has held steady, and in some cases increased, while timber harvest levels have fallen dramatically over the past 15 years, a conservation group's new study says.

The shift from large-scale clear cuts to commercial thinning of forests and fuels reduction projects has accelerated the government's losses to an estimated $6.6 billion since 1997, according to Rene Voss of the nonprofit John Muir Project of the Earth Island Institute, author of the new study.

"The bottom line is that on average over the last seven years, the Forest Service has lost what we estimate to be $835 million annually," he said.

"When it comes to commercial timber sales, it's just like a big black hole and they keep throwing more and more money into it," said Steve Holmer, a spokesman for The Wilderness Society in Washington D.C.

Timber industry officials say the figures don't tell the whole story because much of the expenditures that show up as costs of timber sales are tied to other things, such as clearing brush and bug-infested trees to reduce wildfire threats.

"I'm not surprised they are losing money but they are not comparing apples to apples," said Chris West, vice president of the American Forest Resource Council based in Portland, Ore.

"Often the work has more value than just timber sale value. If you are doing fuels treatment as part of a timber sale, there is a net public benefit to doing that," he said.

Environmentalists and some taxpayer groups long have criticized subsidies of federal logging. But Voss, in a report to be released next week titled "Taxpayer Losses from Logging Our National Forests," said the practice is more disturbing today because of growing U.S. budget deficits.

"Congress is trying to find all sorts of places to try to cut spending after the hurricanes on the Gulf Coast," he said. "We have a lot more important national issues we should be spending our money on."

Congress funds the Forest Service's logging operation, which includes examining potential ecological effects and preparing logging plans before selling the rights to the wood to timber companies, which in turn cut the trees for their own profit.

Part of what the timber companies pay is reinvested in Forest Service reforestation programs, and part of it is returned to the U.S. Treasury - although there's been none left for the Treasury the past four years. In three of those years a net loss was incurred, Voss said.

During the peak years of the 1980s, the agency logged as much as 12 billion board feet a year on national forests, about one-third of that in Oregon, Washington and northern California.

But national output fell to below 4 billion board feet after the northern spotted owl was declared a threatened species and court battles ensued in the early 1990s. In recent years, annual harvests have hovered around 2 billion board feet, with the cherry hardwoods of Pennsylvania and pine plantations of the Southeast now rivaling the Northwest's Douglas fir as the most profitable products.

Mark Rey, U.S. agriculture undersecretary overseeing the Forest Service, said the purpose of the majority of timber sales on national forests today is to reduce fire threats, not make money.

"Indeed, as we move more heavily into restoration work and fuels treatment work, the value of the material we are removing for timber sale purposes will continue to decline and more of those timber sale contracts are going to be more expensive," Rey said.

"If they want us to on the other hand go in and harvest old-growth again, the program can turn a quick profit. But I don't think that is the objective they want to achieve," he said.

Even during the early 1990s, when agency officials insisted the government was making money, environmentalists disputed the claims and said the Forest Service was failing to take into account indirect expenses that go into timber harvests, such as road-building and reforestation.

Conservationists gained new ammunition in February 1997 when the White House Council of Economic Advisers concluded that the Forest Service had spent $234 million more than it made logging national forests in 1995.

It marked the first time an administration had formally accepted environmentalists' claims that Forest Service accounting practices were hiding overall logging costs to taxpayers.

The new study by Voss - and related research papers by the conservation group Heartwood in Illinois and Indiana - suggest the subsidies have grown.

Voss said the Forest Service hides the costs of timber sales by listing expenses under other items, such as road maintenance, thinning and fuels management. He made his calculations by adding varying percentages of those accounts to the overall timber sale budget when the work contributed to producing forest products.

Jim Culbert, a budget assistant for the Forest Service in Washington D.C., said he spoke with Voss several times while Voss was compiling his data and finds most of his estimates to be "reasonable."

"I'm not surprised to see those kinds of numbers," Culbert said.

Culbert said it costs considerably more today than 15 years ago to prepare a timber sale due in part to stricter environmental oversight and legal challenges.

"People can quibble with some of the percentages. There's a levels of gray in there, but what he's done is not unreasonable," Culbert said. "He's making his best guess and I don't see anything that is way off base."

Mark Donham, Heartwood's program director, said he studied the agency's finances and the Forest Service's own budget figures - without the adjustments Voss has made - suggest losses of $300 million to $400 million annually in recent years.

"Even using the Forest Service's lowball figures, it is hard to justify losing our forests and our money at the same time, while a handful of private timber companies profit handsomely," he said. "But that's what is happening."

Culbert disagreed with the call to end logging in national forests.

"There's some sort of assumption the timber program should be making money. And we were making money - taking in more money than we spent on those programs in the heyday of timber program," Culbert said. "But nothing in the law says we must do that. Our mission is to manage the lands for multiple use."

West said the conservationists are using "voodoo-Enron accounting practices" to exaggerate the costs of the timber management program.

"They are speaking out of both sides of their mouths, calling for more hazardous fuels projects near communities, but they don't like the expense of doing that work," he said.

Rey said it's true that costs exceed returns on many timber sales conducted to reduce fire threats.

"But it is still the most cost-effective way to do that fuels treatment because you at least have some revenue coming back to partially offset the expenditure," he said.

Rey said the Earth Island Institute shares responsibility for running up the costs of logging because it has filed lawsuits challenging timber sales and recently won an injunction that prevents the Forest Service from waiving some environmental reviews through "categorical exclusions" so as to expedite fuels treatment.

The Forest Service estimates that injunction will increase costs and force delays across about 1.8 million acres targeted for fuels treatment over the next year, Rey said.

"It seems to me to be an instance of a group causing a problem it is now decrying," he said.



On the Net:

John Muir Project: www.johnmuirproject.org/

U.S. Forest Service: http://www.fs.fed.us/

American Forest Resource Council: http://www.afrc.ws/