ENVIRONMENTAL NATURAL RESOURCE DAMAGE LIABILITIES

12 Months Ended

Dec. 31, 2020

Environmental Remediation Obligations [Abstract]

ENVIRONMENTAL AND NATURAL RESOURCE DAMAGE LIABILITIES

Various federal and state environmental laws in the states in which we operate place cleanup or restoration liability on the current and former owners of affected real estate. These laws are often a source of “strict liability,” meaning that an owner or operator need not necessarily have caused, or even been aware of, the release of contaminated materials. Similarly, there are certain environmental laws that allow state, federal, and tribal trustees (collectively, the “Trustees”) to bring suit against property owners to recover damage for injuries to natural resources. Like the liability that attaches to current property owners in the cleanup context, liability for natural resource damages (“NRD”) can attach to a property simply because an injury to natural resources resulted from releases of contaminated materials on the owner’s property, regardless of culpability for the release.

In connection to the merger with Pope Resources, we assumed ownership of certain real estate in Port Gamble, Washington, which requires environmental remediation under these laws.

An analysis of environmental and NRD liabilities from December 31, 2019 to December 31, 2020 is shown below:


			Port Gamble, WA (a)
Total Balance at December 31, 2019			—
Liabilities assumed in merger with Pope Resources			13,003
Expenditures			(1,362)

Total Balance at December 31, 2020			11,641
Less: Current portion			1,026
Non-current portion at December 31, 2020			$10,615

(a)Represents environmental and NRD liabilities assumed in the merger with Pope Resources. Pope & Talbot Inc. operated a sawmill from 1853 to 1995 and conducted shipping, log storage, and log transfer operations in the Port Gamble Bay area from 1974 to 2004. P&T’s operations resulted in the release of contaminated materials to the townsite, millsite, and adjacent bay. Prior to the merger, the in-water portion of the clean up was completed. In November 2020, a consent decree, which includes a cleanup action plan, was entered in Kitsap County Superior Court. Negotiations with the Trustees relating to NRD liabilities are currently ongoing and will ultimately result in agreement as to requested mitigation activities.

These estimates were based on assumptions that we believe to be reasonable; however, actual results may differ from these estimates. See Note 2 - Merger with Pope Resources for information regarding our preliminary estimates of fair value. It is expected that the millsite cleanup and NRD restoration will occur over the next two to three years, while the monitoring of the Port Gamble Bay, millsite and landfills will continue for an additional 10 to 15 years. The NRD costs are subject to change as the scope of the restoration projects become more clearly defined. It is reasonably possible that these components of the liability may increase as the project progresses. Management continues to monitor the Port Gamble cleanup process and will make adjustments as needed. Should any future circumstances result in a change to the estimated cost of the project, we will record an appropriate adjustment to the liability in the period it becomes known and when we can reasonably estimate the amount. For further information on the timing and amount of future payments related to our environmental remediation liabilities, see Note 10 - Commitments.