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Five years ago, some of Oregon's most valuable forests were on the verge of being decimated by the voracious insect known as the gypsy moth.

But it never happened. Instead, the state won a stunning victory, virtually eliminating the insect with the use of a little-known biological insecticide whose application was supported by most environmental groups.As a result of its success, Oregon has become the prime moth-fighting model for a number of other states now faced with mounting their own eradication campaigns. Virginia, Utah, Ohio and Colorado are among the states examining Oregon's program.

Utah has just completed a spraying program for gypsy moths in the Mount Olympus Cove area of southeast Salt Lake County.

The state's decade-long battle cost nearly $20 million and involved fleets of helicopters and legions of ground crews.

But with state officials, timber industry representatives and environmentalists cooperating, the battle against the insect that defoliated entire forests in the Northeast was won.

"Simply put, Oregon accomplished what few, if any, thought possible - near-eradication of the gypsy moth," said Gary Smith, spokesman for the U.S. Department of Agriculture's Animal and Plant Health Inspection Service.

In late 1984, that prospect seemed remote.

After six years of limited moth catches, state officials discovered a flourishing infestation in rural south Lane County. It was the largest outbreak of gypsy moths ever discovered west of the Mississippi River.

The earlier detections were largely limited to pockets within suburban areas of Salem, Gresham and Corvallis. Air and ground treatments of chemical insecticides were unwanted by some but proved effective.

However, when swarms of male moths became so thick they clogged specially scented traps near Pleasant Hill, state officials knew a bigger effort was required.

The gypsy moth, named for its propensity to spread by laying egg masses on and under vehicles traveling out of infested areas, was on the edge of the priceless timberland of the Willamette National Forest.

At stake were the future of Oregon's $275 million nursery and Christmas tree industry, as well as Lane County's $600 million annual take from all forest products.

"The potential loss if that thing ever got out there and truly established was tremendous," said Leroy Kline, head of the state Forestry Department's Insect and Disease Division. "Some very knowledgable people thought our worst nightmare was here to stay."

A 16-member task force wrangled for weeks attempting to formulate a plan of attack.

Environmentalists, led by Lane County Commissioner Jerry Rust, adamantly opposed the widespread use of chemical insecticides. Instead, they promoted a promising but little-known biological agent, Bacillus thuringiensis, or B.t.

The timber industry and many state planners wanted to use more powerful chemical sprays.

The matter went to court. But before a judge's ruling could be obtained, the state elected to spray heavy doses of B.t. over 227,000 acres of infested area in Lane County in 1985 and 190,000 acres in 1986.

Spraying was also slated for far smaller infestations near Glide, Lake Oswego, Corvallis, Cave Junction, Salem, Gresham and two areas of Portland.

By all accounts, the largest eradication program ever to rely solely on B.t. as its exterminating agent worked.

"It's a victory, no doubt about it," said Jeff Miller, an Oregon State University entomologist who has studied the moth and its fabled appetite extensively. "I definitely thought the moth was here to stay when the 1984 infestation turned up in Lane County."

Environmentalists fought for and now applaud the state's decision to proceed with B.t. But they continue to express caution about its use.

Invented in the 1950s, B.t. must be ingested by the insects to be effective. Enzymes cause it to crystallize in the alkaline gut of the feeding caterpillar, eventually starving the insect.

Relatively little has been learned about B.t.'s effects on other animal and insect populations.

"We have no idea what Oregon lost in terms of unrelated caterpillar and butterfly populations and birds who relied on those caterpillars to feed their young," said Mary O'Brien, staff scientist for the Northwest Coalition for Alternatives to Pesticides. "But we feel B.t. is not something to go about spraying freely just because it doesn't knock people dead."

Follow-up studies do not indicate that B.t. is harmful to healthy human beings, said Dr. Lawrence Foster, state epidemiologist. But he cautioned that its effects on people with weakened immune systems must be studied if B.t.'s success spawns a new generation of biological pesticides.

"My own feeling is that B.t. is safe in the doses used," Foster said. "But the research certainly shouldn't stop here."