TONGASS NATIONAL FOREST
                                            Release No. 0059.97
                                                               
                                Jim Petterson    (202) 720-4623
                                Tavia Hollenkamp (907) 586-8806

AGREEMENT REACHED TO CANCEL LONG-TERM TIMBER CONTRACT IN SOUTHEAST ALASKA'S  
  TONGASS NATIONAL FOREST

     WASHINGTON, February 21, 1997--The Clinton Administration today
announced that an agreement had been reached between the United States and
the Ketchikan Pulp Company (KPC), a subsidiary of Louisiana Pacific, that
will cancel KPC's long-term timber contract, protect the environment and
maintain jobs to ease the burden on Southeast Alaska communities hard hit by
the company's decision to close its Ketchikan pulp mill. 

     The government and KPC have agreed that the company's long-term
contract to harvest timber in Southeast Alaska's Tongass National Forest
will be canceled.  Over the next three years, KPC will receive 300 million
board feet of contract close-out timber to permit the continued operation of
company sawmills at Ketchikan and Metlakatla.

     KPC will be required to maintain a combined average employment at its
sawmills of at least 195,000 person hours per year to achieve a cumulative
total for three years of 585,000 person-hours to smooth the economic
transition in communities heavily affected by the pulp mill's closure. 
Additional jobs will be retained in timber harvesting and other support
activities. 

     KPC has committed to operate in compliance with environmental laws,
including the clean-up of waste sites such as Ward Cove in Ketchikan, the
site of the pulp mill.  KPC will provide periodic reports to the U.S. about
its compliance with environmental laws.  KPC's parent company, Louisiana
Pacific (LP) will help ensure that KPC meets its environmental protection
obligations.  If KPC is dissolved or goes bankrupt, or in the event it does
not meet its environmental obligations, LP must carry out those obligations. 
Further, LP makes substantial financial assurances that money will be
available to meet these environmental obligations.

     Also under the agreement, the U.S. will pay KPC $140 million to
resolve all past and future legal claims, and both KPC and the U.S. will
release all legal claims they may have against each other.  

     "While no agreement could erase the difficulties caused by the loss of
a major employer, this agreement will help protect jobs and permit a smooth
transition to future management of the Tongass National Forest," said
Agriculture Secretary Dan Glickman.  "I am pleased that the agreement
ensures that KPC will meet its environmental obligations, including the
clean-up of waste sites.  I have committed to Alaska Governor Tony Knowles
that USDA will continue to work closely with the people and communities of
Southeast Alaska to help protect the economy and families in this period of
transition for the timber industry."

     "This agreement will allow us to leave behind expensive, time
consuming litigation and demonstrates that jobs and environmental protection
can go together," said Lois Schiffer, assistant attorney general in change
of the Justice Department's Environment and Natural Resources Division.

     This agreement reflects a commitment made last October by former White
House Chief of Staff Leon Panetta with members of the Alaska congressional
delegation to work with KPC to reach an agreement on contract cancellation
that ensures sustainable and diversified opportunities for workers,
families, industries and communities of Southeast Alaska.

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