Another Recycled Newsprint Mill Is on the Ropes

High prices for recycled paper are threatening to shut down what may be North America’s premier recycled-newsprint mill, Catalyst Paper revealed today.

“Increasing ONP [old newspaper] prices will negatively affect manufacturing costs at the Snowflake mill, and could result in future production curtailment at that mill,” the company said in its first-quarter earnings presentation.

The Snowflake, Arizona mill uses only recycled fiber, not virgin fiber in its products. Catalyst bought the mill in early 2008 when the Justice Department forced Abitibi to sell Snowflake before merging with Bowater. Some observers thought the feds chose Snowflake because it was Abitibi’s lowest-cost mill.

The newspaper industry’s woes have led to reduced supplies of recycled newsprint, while huge new paper machines in timber-short China have created more demand for recycled paper.

The result is that prices for some types of recycled paper have tripled in barely a year. The rising costs of recycled fiber have already forced four other North American newsprint mills to close this year, industry analyst Verle Sutton wrote recently in Recycled Newsprint Machines are Becoming an Endangered Species.

“Demand [for recycled fiber] exceeds supply and will continue to exceed supply for many years,” Sutton added last week.

For more information about paper with recycled content, please see:

• Three, or Maybe Four, Green Magazine Pioneers, which has this quotation from Hearst, which uses recycled fiber extensively in its newspapers but not its magazines: “After extensive review, we currently believe newspapers and other end uses (packaging, wallboard, etc.) are the most efficient use for recycled fiber, which continues to be in short supply.”
• I'm an environmental idiot!, which backs up the Hearst claim – showing that using recycled fiber in newsprint makes more sense environmentally than in such higher-grade products as office paper or paper for catalogs.
• Noisy Boise Is Reviving Its Newsprint Sales,which shows how one company used black-liquor tax credits to take market share last year from recycled-newsprint mills (including Snowflake).
• Hey, big boy, can I recycle your cardboard?, which tells what happened when the number for a toll-free recycling-information line was taken over by a telephone-sex service – and reminds us that there was a brief glut of recycled paper in late 2008 and early 2009.

Flats Sequencing Map

This map from a recent Postal Service presentation illustrates that Phase I of the Flats Sequencing System is heavily concentrated on the East Coast, especially the Northeast. (Click on the map to magnify it.)

More than half of the 100 machines are slated for Eastern Seaboard states, and more than one third are in the megalopolis that runs from Boston to Washington, DC.

The Postal Service is putting the machines into major urban areas, close to the kind of carrier routes that tend to get the highest volumes of catalogs, magazines, and other flat mail. To avoid construction costs, postal officials are also mostly limiting Phase I to buildings having enough excess space to hold the football-field-sized machines.

The end result is that Phase I bypasses such major metropolitan areas as Dallas/Fort Worth, St. Louis, and Seattle. Between the declining volume of flat mail (such as catalogs and magazines) and problems getting the machines up to standard, those areas may never get an FSS machine.

For more information about the Flats Sequencing System, please see:

• The Unofficial Guide to Flats Sequencing 
• USPS Is Accelerating Flats Sequencing Installations 

Dogwood Alliance Responds

Lindsey Simerly of Dogwood Alliance was quick to respond to today's article, Condoms to the Rescue, and 5 Other Novel Ideas for Saving the Forests, in which I questioned her organization's "Kentucky Fried Forest" campaign: 

I am the campaign organizer for Dogwood Alliance and I am happy to answer your questions about our Kentucky Fried Forests campaign. Our main goals are protection of Southern forests, but we are not advocating for Styrofoam or other non-biodegradable as an alternative. What are asking for immediate and substantive steps towards a credible sustainable packaging policy, including:

•Reducing the overall packaging for your products
•Increasing the use of post-consumer recycled paper in your packaging
•Where recycled paper is not available, making sure your paper originates from well-managed forests as certified by the Forest Stewardship Council (FSC).

You are absolutely right that IP no longer owns much land in the South. However, we believe in holding IP accountable for the supply chain impacts of its business operations. The fact that IP doesn't own land is irrelevant in the 21st Century as more and more consumers (corporate and individual) want to know where their products come from and what the impacts are. Whether it's customers wanting to ensure that the clothing they buy isn't coming from sweat shops employing kids in China, that their energy isn;t coming from mountaintop removal or their paper coming from destroyed forests, corporations around the world are now being held accountable for the environmental and human rights impacts of their business decisions. Not owning the factory or the coal fields or the forest is no longer any justification for serious negative impacts.

IP is by far the largest paper producer in the Southern US and world. As such a huge economic driver in the region, it has a responsibility to ensure that the profits it makes do not come at the expense of our environment and local communities. Other paper companies such as AbitibiBowater and Domtar are doing their part to improve forestry practices on private lands where they source fiber for their products and IP can do the same.

Also, currently landowners don't receive adequate value for maintaining forests. We believe the solution is to increase the value of keeping ecosystems intact. See our new Carbon Canopy initiative for more information. Landowners should get paid more to log less and protect their forests. We're not there yet, but it is the wave of the future.

Condoms to the Rescue, and 5 Other Novel Ideas for Saving the Forests

Wear condoms, retire the bear, and eat less fried chicken.

Those are among the unusual ideas for helping the environment in general and forests in particular that were turned up by a Dead Tree Edition study of recent news reports. I don't think you'll see these in the mainstream media's usual Earth Day articles:

Wear condoms
Not just any condoms, mind you, but Brazilian condoms made from genuine rubber rather than petroleum-based synthetics. The Brazilian government, the world’s largest buyer of condoms, has opened a factory that will produce 100 million rubber condoms per year, the Guardian reports.

“The condom project is both environmentally and economically sustainable,” says the Guardian. “It will provide an income to around 550 families and reduce the incentives for deforestation. The Government says the condoms are the only ones in the world made of latex harvested from a tropical forest” rather than from oil-based synthetics that are cheaper than natural rubber.

The Brazilian government’s condom-giveaway program could buy up all of the factory’s production. But think of how much more of the Amazonian rainforest could be preserved if more factories were built for overseas markets. That, however, would require some branding and marketing efforts to win customers for these high-priced condoms.

Suggested brand name:“The Natural”? Or, playing on the competition’s references to Greek mythology, there could be a brand for women buyers called “Amazon’s Shield”. Suggested slogan: “When you wear a rubber, be sure it’s rubber!”

By the way, there’s no word on whether natural-rubber condoms are carbon neutral or cruelty free. And please don’t ask whether they’re recyclable.

Retire the bear
Industry, government, environmentalists, and scientists agree that northern Arizona’s ponderosa pine forests have “too many trees” and that the solution is selective logging, according to Northern Arizona University’s Ecological Restoration Institute.

The various parties have agreed on a forest-restoration project that aims “to restore ecological and economic health by reducing fire danger and protecting communities, returning our forests and rangelands to a healthier condition that can function with low-intensity natural fire, and providing opportunities to create jobs and stimulate local economies." The stakeholders blame “past fire suppression policies” for causing the forests to be packed with high densities of small-diameter trees that are prone to uncontrollable fires.

I blame the bear. Smokey the Bear.

For decades, his stern “Only YOU can prevent forest fires” has brainwashed Americans from the toddler stage on up that forest fires are bad and are caused by bad people. The result is that we have tried to stamp out every fire.

Fire, especially in the American West, is a natural and important process that thins underbrush and small trees and enables certain species to thrive. It’s time for Smokey to take a hike – though he might have a hard time finding a path through all the trees.

Ban Laura Ingalls Wilder Books
Speaking of brainwashing and forest fires, we’ve got to keep our kids away from Laura Ingalls Wilder books. Every year, thousands read Little House in the Big Woods and decide they too want a little house in the big woods when they grow up.

Having all of those little houses in the big woods (not to mention Big McMansions in the Little Forest) creates political pressure to fight every forest fire rather than letting nature take its course.

If you want the truth on climate change, follow the money
One way to cut through all of the debate about global climate change is to see how businesses are placing their bets, notes "Betting on Change" at the excellent new Web site The Climate Desk (a collaboration of several prominent media outlets, including The Atlantic, Wired, and Mother Jones magazines).

“If a firm's bottom line is going to be affected by a changing climate—say, when its supply chains dry up because of drought, or its real estate gets swamped by sea-level rise—then it doesn't particularly matter whether or not the executives want to believe in climate change.”

The article then goes on to show how a variety of businesses and industries have already demonstrated – through adaptations, investments, insurance purchases, and the like – that they believe the problem is real.

Use less recycled paper
Paper-industry analyst Verle Sutton recently pointed out that several North American newsprint mills that relied on recycled pulp have been driven out of business by the high price of recycled paper. One culprit is the push by some environmental groups to include recycled content in high-quality papers, which is actually bad for the environment.

“Utilizing recycled fiber in packaging, and the lower quality paper grades (as well as insulation and other industrial applications) is much, much more environmentally healthy than utilizing this fiber in higher quality grades,” he writes. For more on why such “up-cycling” is not a good idea, see I'm an environmental idiot!

(Because Sutton mentions the FutureMark coated-paper mill near Chicago, I should pass along some explanatory information provided by my readers: Much of the mill's fiber comes from unsold magazines and waste from nearby web printers, so it’s not up-cycled. The rest comes from Chicago-area curbside collections, so to some extent the relatively low carbon footprint of transporting the fiber makes up for the up-cycling.)

Eat less fried chicken
The environmental group Dogwood Alliance recently launched the Kentucky Fried Forest campaign because it alleges that KFC's “paper packaging is directly contributing to the destruction of our Southern forests.” KFC is targeted because it “is one of the major purchasers from International Paper,” which is “notorious for business-as-usual destructive forest management practices” in the U.S. South.

Dogwood Alliance needs to answer a few questions (see the subsequent response from its campaign coordinator) before I’ll start urging people to boycott the Colonel:

• Would it prefer that KFC use Styrofoam “clamshells” and other non-biodegradable packaging materials, as some other fast-food restaurants do?
• To what extent is the alleged trouble occurring in forests that IP manages as opposed to non-IP forests that merely sell to IP? IP sold off much of its forestry operations several years ago.
• What would happen to those Southern forests if IP stopped using their trees? Would they be converted to agriculture or housing developments? Or to other species of tree? (And, by the way, can rubber trees grow in the South? If so, here’s a suggested brand name for condoms made of GEN-yoo-INE Southern rubber: “Rebel Yell”).

Legal Challenge Likely for Exigent Rate Increase

Mailers are likely to challenge the U.S. Postal Service’s ability to raise postal rates by more than the rate of inflation next year, a postal expert says.

Joe Schick, Director of Postal Affairs for Quad/Graphics, believes the Postal Service plan to implement exigent rate increases in January means it will file its request within three months. Postal officials indicate the average increase would be less than 10%, with Periodicals probably paying more than the average.

“When the filing is made, expect a legal challenge by the mailing industry on the grounds that a bad economy does not constitute an ‘emergency’ situation as intended by the language of the law,” Schick wrote this week in a blog at Quad’s Web site. Because Quad mails millions of catalogs and magazines every week, Schick (and his counterparts at the other major publication printers) has extensive contacts both with mailers and postal officials.

Some members of Congress who were involved in developing the postal-reform law agree that the Postal Service’s financial troubles are not grounds for exigent increases, sources tell Dead Tree Edition. Normally, annual rate hikes for most classes of mail are capped by changes in the Consumer Price Index. But the postal-reform law also includes a provision “whereby rates may be adjusted on an expedited basis due to either extraordinary or exceptional circumstances.”

When the Postal Service request such rate increases, the law gives the Postal Regulatory Commission 90 days to determine whether “such adjustment is reasonable and equitable and necessary to enable the Postal Service, under best practices of honest, efficient, and economical management, to maintain and continue the development of postal services of the kind and quality adapted to the needs of the United States.”

The law does not state exactly what “extraordinary or exceptional circumstances” would justify rate increases that exceed the rate of inflation. But Congress had in mind terrorist attacks or other national emergencies, not budget gaps, sources say. The expectation was that in normal times the Postal Service would live within its means – though Congress also gave the Postal Service limited ability to reduce its costs.

Schick also notes that the PRC has the authority to adjust, up or down, a USPS request for exigent rate increases.

“That could prove to be hazardous to those classes or categories of mail that are currently not at 100% cost coverage – Standard Mail flats [mostly catalogs] and Periodicals in particular.”

Related articles:

• A subsequent article at Courier, Express, and Postal Observer noting an interview in which two mailing-association executives said their groups would "challenge the legal basis for an exigent rate case and in particular whether a recession and electronic diversion represent 'extraordinary or exceptional circumstances.'"
• Seven Misconceptions About the Postal Service's Action Plan
• Postal Service Preparing Double Whammy for Publishers 
• Increased Efficiency Led to Higher Periodicals and Catalog Costs, Goldway Says  

Grandson of Black Liquor: Congress Milks Another Pulp Byproduct for Bogus Savings

For the second time this year, Congress plans to “pay” for a new program partly by closing a non-existent loophole involving a pulp byproduct.

The House-passed version of the “Small Business and Infrastructure Jobs Tax Act of 2010” counts on nearly $1.9 billion in revenue from making crude tall oil ineligible for Cellulosic Biofuel Producer Credits (CBPC). As with the $23.6 billion Congress recently “saved” by closing the mythical Son of Black Liquor loophole, the crude tall oil savings are a mirage because the chemcial probably could not qualify for the credits anyway.

Crude tall oil starts as a substance skimmed off of black liquor at kraft pulp mills that use pine as their wood source. In theory, it can be burned as a fuel, but it is almost always refined into more valuable chemicals that are used in such products as soaps, inks, adhesives, lubricants, and rosin. (Yes, baseball and fiddle fans, that kind of rosin.)

The legislation, which has been referred to the Senate Finance Committee, states that “The term ‘cellulosic biofuel’ shall not include any processed fuel with an acid number greater than 25.” (Acid number, rather than pH, is the measure of acidity commonly used for oils.)

“The normal acid number for crude tall oil is between 100 and 175,” says an explanatory document from Congress’ Joint Committee on Taxation. “Since the acid number for crude tall oil exceeds 25, crude tall oil would no longer qualify for the credit under the provision.”

Current law already states that a substance must be approved by the EPA as a motor fuel or fuel additive to qualify for CBPC payments. Crude tall oil’s high sulphur content and acidity make it an unlikely candidate for such approval. There has been some testing of turning crude tall oil ingredients into motor fuels, but those would not be affected by the proposed legislation because of their lower acid numbers.

Note to Congress: If you want to look as if you are slapping the forest-products industry around while generating some savings for the federal government, you should know that turpentine, bark, branches, sawdust, and firewood are also cellulosic biofuels that the industry produces. None, of course, can qualify for CBPC, but that hasn’t stopped you before. If you pay me 1% of the estimated savings from closing these non-existent loopholes, I will reveal my true identity so that you know how to write out the check.

Question for horror-movie fans: If there is another loophole related to black liquor, whether real or imagined, what should the sequel to Grandson of Black Liquor be called? Maybe “Black Liquor Meets Godzilla”? (Or does that sound too much like Hideki Matsui following in the footsteps of Mickey Mantle?) A commenter suggested "Creature From the Black Liquor Lagoon": I love it!

For those not familiar with how the once-obscure pulp byproduct known as black liquor led to multibillion-dollar payouts to the pulp industry last year (the original black liquor tax credits) and a convenient source of funding for healthcare reform (Son of Black Liquor), these articles provide a quick chronology:

• Pulp Fiction: Eco-Credits for Black Liquor  
• Did Black Liquor Credits Pave the Way for Healthcare Legislation? 
• Black Liquor Scorecard: 21 Companies Earned $6.5 Billion in 2009  
• Republican Senators Defend Bogus Black-Liquor Accounting

GAO Suggests Plant Closings, Two-Tiered Wage Structure for USPS

The U.S. Postal Service should look into closing more than half of its mail-processing facilities, be wary of "exigent" rate increases, and consider getting postal unions to "eat their young," the Government Accountability Office recommended today.

The news media are focusing on other aspects of the GAO's report, such as its support for giving the USPS the power to eliminate Saturday delivery, close post offices, and reduce its workforce. But three other significant recommendations in the report are escaping the headlines:

Two-tiered pay system
To rein in wages and benefits, which make up about 80% of its costs, the Postal Service should consider "a two-tier pay system that would pay new hires lower wages, while 'grandfathering' current employees under the current pay structure," the report says. In the labor movement, that is often called "eating your young" -- trading away future employees' pay in return for protecting the compensation and job security of current union members.

Close mail-processing facilities
The GAO urges the Postal Service to move faster in the closing of its 270 processing and distribution centers, stating that only two have been closed since 2005. (It apparently overlooked some recent closures and others that have been approved but not yet implemented).

"Some stakeholders have estimated that roughly over one-half of these facilities are not needed," the report says. "One senior USPS official estimated that about 70 processing facilities could be eliminated if local First Class mail were to be delivered in two days instead of overnight."

Postal officials acknowledge they have excess capacity in the mail-processing network, according to the GAO. Mailers complain that having too many P&DCs is a lose-lose proposition -- wasting the Postal Service's money while also making it harder for customers to get dropship discounts.

A caution on exigent rate increases
The report questions whether the Postal Service can implement exigent (higher than inflation) rate increases, as it plans to do early next year, because such rate hikes are "limited by law to extraordinary or exceptional circumstances." Some have questioned whether a financial crisis is the sort of circumstance Congress had in mind when allowing for exceptions to the inflation-based price cap.

"An exigent rate increase over the price cap may produce a large short-term revenue boost. However, a very large rate increase could be self-defeating by increasing incentives for mailers to accelerate diversion to electronic alternatives, thereby lowering revenues in the long run and adding to USPS excess capacity," the report says.

Related articles:

• USPS Steps Up Mail-Processing Consolidation
• Why Potter Is Freezing Postal Rates, And What It Means For 2010 
• Postal Service Preparing Double Whammy for Publishers  

The Yellowing of National Geographic: Will Today's Copies Age Faster Than That Stack in Your Gramma's Attic?

Fifty-year-old copies of National Geographic often look as good as the day they were printed, but current issues of the magazine might not age so gracefully.

The National Geographic Society recently revealed that the interior pages of its iconic magazine are printed (in the U.S., at least) on coated groundwood (CGW) paper, which means it contains a natural substance called lignin that is associated with yellowing and degradation of paper. For decades, the magazine was printed on coated freesheet paper, which ages much more slowly because it contains only lignin-free pulp.

Rumors of the magazine’s switch to less costly CGW, which had circulated for a couple of years, were confirmed in a recent Gravure Magazine article (available only to members of the Gravure Association of America) about the society working with Verso Paper to document the carbon footprint of National Geographic's U.S. edition.

“We estimated the forest-to-gate carbon footprint for 50-pound National Geographic Gloss paper with and without recycled content," said Craig Liska, Verso vice president for sustainability, in the article. “The assessment of this coated groundwood product manufactured at our Androscoggin (Maine) mill began with the acquisition of raw materials and ended with the product ready to ship.”

The term “coated groundwood” usually refers to paper consisting of at least 10% mechanical pulp (also called groundwood pulp), which still contains lignin. In wood, lignin acts as a sort of glue that binds wood fibers together. In paper, it leads to yellowing when exposed to oxygen and light.

The article indicates that the paper uses a combination of kraft pulp (from which the lignin has been removed), mechanical pulp, and a small amount of recycled pulp (which may or may not contain lignin). Other ingredients include calcium and carbonate, suggesting that the paper is “acid free” and therefore not as prone to yellowing and degradation as groundwood papers using an acid process.

When it comes to aging, not all groundwood papers are equal. A 30-year-old paperback might crumble in your hands because the paper contains only mechanical pulp. But the paper in a 1980 copy of Sports Illustrated, which (like current copies of National Geographic) contains both kraft and mechanical pulp as well as coating, probably just looks a bit dingy and tattered.

National Geographic’s paper is still extremely bright and white by U.S. magazine standards. Because lignin tends to darken paper, achieving such quality with coated groundwood paper was not possible until recent advances in paper-making technology.

And what about that carbon footprint? It’s just over 29 ounces for a typical copy weighing 12.3 ounces, the article reports; using more recycled pulp had minimal impact on reducing that number. About 70% of the total is from paper manufacturing (mostly from electricity generation and the burning of fossil fuels at the mill), 26% from printing and distribution, and 4% from such other activities as packaging and landfilling. The society plans to conduct similar studies of its other products, then use the data to set goals for reducing greenhouse-gas emissions.

Trying to reduce greenhouse gases could leave the society with a difficult environmental choice. The manufacture of kraft pulp has a low, sometimes no, carbon footprint because black liquor extracted from the wood is burned to generate electricity. But most environmentalists say that mechanical pulp is more environmentally friendly because it uses fewer trees per pound of pulp.

For more information about how some other magazine publishers are reducing their carbon footprint, please see Three, or Maybe Four, Green Magazine Pioneers.