Saturday, June 20, 2009

Why U.S. Pulp Mills Are Like NBA Players

My friend the youth basketball coach cringes at mentions of the NBA because of the bad habits his players pick up from watching it.

After seeing their favorite pro player take a couple of steps before dribbling, the kids have trouble telling the difference between proper ball handling and a traveling violation. But my friend doesn't blame the NBA players.

As an environmentalist who makes a living from printed products (at my day job, not from this blog), I hate to see U.S. pulp manufacturers rake in billions of government dollars in black-liquor credits. They are accepting environmental-incentive money for doing something that does nothing for the environment, which could lead to public backlash against all paper-based products.

But I don't blame the pulp and paper companies.

It's the NBA's job to set the rules. It's the players' job to do what they can within those rules to help their team win. It's the refs' job to decide when the rules are broken.

It's the government's job to establish laws and regulations. It's a business's job to maximize its owners' return on investment while working within those laws and regulations. And it's the IRS' job to decide when a pulp mill qualifies for the black-liquor credits.

Forest-products companies are used to being on the wrong side of foolish government policies and pronouncements -- most recently California Governor Arnold Schwarzenegger's claim that digital textbooks are greener than printed ones. Can we blame them for taking advantage of a foolish government policy that for once is in their favor?

Can we, for example, criticize Domtar for its decision last week to accept the credits, which enabled it to reopen its pulp mill in Baileyville, Maine and put 300 people back to work? Can we blame the manufacturers if government policy now gives them an incentive to displace recycled pulp and mechanical pulp with kraft pulp?

Self-righteous Congressmen criticizing pulp and paper companies for accepting black-liquor credits is as hypocritical as NBA officials complaining about the sloppy dribbling of pro basketball players. If you’re in charge of making the rules, don’t complain about people who follow your crummy rules; change the rules.

American forest-products executives do need to understand one thing: Don’t expect any sympathy from Congress, or your customers, the next time you come around whining about how the Chinese, or the Canadians, or the Finns are subsidizing their mills and dumping their product in the U.S. After chugging black liquor this year, don’t try to tell us next year how pure you are.


CrankyCollege said...

Well I guess if you are going to reward "green" behavior I can't think of any greener behavior than burning the waste liquor from pulping wood. The reward is long over due for this hard working and maligned industry. I would point out that this problem comes about as the result of social engineering by our congress, i.e.: trying to economically advantage "green" activities. This is a small unintended consequence. The cap and trade energy bill will be worse. It will cost jobs as it creates a new derivative trading. Haven't we just seen how damaging derivative trading has been? Congress is inventing new ways to destroy the economy.

Unknown said...

I believe you have a minor misunderstanding here.

"Chugging black liquor" IS the renewable green activity. Pulp mills began adding diesel fuel and other fossil fuels to the black liquor in order to qualify for the tax credits.

The way the law is written encourages pulp mills to burn fossil fuels instead of staying with renewable forms of energy.

CrankyCollege said...

No misunderstanding. If you have to add a little fossil fuel to 100% green fuel to get a tax credit, it would be "fuelish" :-) not to.