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A denuded hillside high above the Naselle River’s broad estuary bears witness to the power of two laws: the Endangered Species Act and the Law of Unintended Consequences.

It wasn’t supposed to work this way.

A year ago, a 24-acre patch of the hillside was covered with 30-year-old hemlock and fir. Vincent Shaudys, a retired geography professor who owns the land with his wife, Jean, had planned to let the trees grow at least 10 more years before harvest.

Then a logging company offered a good price for the timber, and Shaudys contracted owl fever-a fear that, if he waited, the Endangered Species Act could block him from harvesting later.

“We had (spotted) owls on three sides of our property,” he remembers. “That’s kind of scary.”

Shaudys sold, and the hillside in Southwest Washington was logged last fall.

Shaudys’ story illustrates what the timber industry, the Clinton administration and environmentalists agree is perhaps the Endangered Species Act’s greatest failing:

It’s supposed to conserve the ecosystems on which protected creatures depend, but often has had precisely the opposite effect. It discourages property owners from providing wildlife habitat.

They fear government-imposed restrictions should a spotted owl or a marbled murrelet nest on or near their property. So they uproot any potential habitat before the critters get a chance.

The problem is attracting more attention this year as Congress debates the future of the Endangered Species Act.

“The law does sometimes create perverse incentives for landowners,” acknowledges Brock Evans, vice president of the National Audubon Society.

In the Northwest, the spotted owl has helped touch off a wave of “panic cutting,” particularly among smaller landowners.

Half the Washington tree farmers responding to a recent survey said regulatory uncertainty had prompted them to harvest earlier, or harvest more.

If Shaudys exemplifies the problem, Lewis County tree farmer Doug Stinson may represent the solution. He hasn’t succumbed to panic cutting; he says some farmers tell him he’s a fool.

Now he is among the first small forestland owners in the Northwest to talk seriously with the U.S. Fish and Wildlife Service about a possible “habitat-conservation plan” for his land.

The plan involves a contract that aims to give s landowner greater management flexibility while still protecting species. Such contracts have been authorized by the Endangered Species Act for years, but few have been written.

The Clinton administration is promoting them as a way to provide landowners with the regulatory certainty they crave, and wildlife with habitat the ESA now dissuades many property-owners from providing.

The problem isn’t limited to the Northwest. Timberland owners in Texas and North Carolina told House task-force hearings on the Endangers Species Act this spring that fear of the threatened red-cockaded woodpecker, another older-forest denizen, had spurred them to log earlier.

Almost everyone involved agrees that isn’t right.

“Landowners should be encouraged to provide good habitat for listed species,” Interior Secretary Bruce Babbitt says, “not penalized for doing so.”

Vincent Shaudys is a tree farmer by marriage. His wife’s father, longtime publisher of a weekly newspaper, started accumulating forest land during the Depression. Today the couple owns about 500 acres in six or eight tracts scattered around the county.

Shaudys commuted to the San Francisco Bay Area for 15 years before retiring from the faculty of California State University at Hayward in 1992. He taught environmental studies as well as geography, but his perspective on the Endangered Species Act isn’t exactly in line with that of the Sierra Club.

Shaudys says the law has cost him money.

His permit for an application to log one 11-acre parcel was held up by the state Department of Natural Resources for two years because it was about two miles from a spotted-owl nest, and because the timber had been classified as owl habitat.

The DNR, which enforces state logging regulations, later stopped following federal owl-protection guidelines. Although the possibility of federal prosecution still loomed, Shaudys got his permit and harvested his timber.

By then, however, the price had dropped.

That experience played a part in Shaudys’ decision to harvest the young trees on the hillside above the Naselle River last fall. They weren’t affected by owl restrictions. But the rules had changed before, and the rules could change again.

Doug Stinson is a tree farmer who sometimes sounds more like a tree-hugger.

He’s a one-time industry forester who talks of falling in love with the Douglas fir on his first visit to the Northwest more than 40 years ago. He’s a businessman who’s not embarrassed to talk about the spiritual value of big, old trees.

As he shows a visitor around his 250 acres above the Cowlitz River near Toledo, Stinson points to big, 90-year-old trees he doesn’t want to cut yet-to the amazement of his fellow tree farmers-because he likes them, and because he thinks they will only become more valuable with time.

No endangered species inhabit his land now. But there’s a big tree overlooking the Cowlitz that biologists have told him is a perfect candidate for a bald eagle’s nest.

The prospect of an eagle thrills Stinson. It also scares him.

“We’d love to bring in an eagle,” he says. “But we don’t want to give up a lot of timber to do it.”

Under Clinton and Babbitt, the Fish and Wildlife Service has focused unprecedented attention on habitat plans and other previously little-used sections of the Endangered Species Act that can make it more user-friendly for landowners.