Dead Tree Edition Tops Twitter and the World Cup

RISI, "the leading information provider for the global forest products industry," shocked me and a lot of sane people as well this week by naming me to its "Power List" of the industry's top 50 movers and shakers.

"Written by the self-styled D. Eadward Tree, the Dead Tree Edition blog is not afraid to dig into the issues that the pulp, paper and publishing industry would rather lay buried under dead leaves," says the article explaining my selection as #43. It says this blog "has become a must-read for anybody involved in the pulp, paper and publishing industries, especially those who like a bit of spice with their breakfast reading."

OK, so #43 is pretty far down the list, but at least it's ahead of Domtar CEO John Williams (#48), FIFA World Cup (#49), and "Social Media: Twitter and LinkedIn" (#50).

My selection to this prestigious list has led to some questions that I will now try to answer:

• Q: How much did you have to pay RISI's editors to get on the list? A: Nothing, I swear.
• Q (from my roommate/partner): So does this mean you will get paid actual money instead of just link-bait when Web sites re-publish your articles? A: Hope springs eternal.
• Q: Now that you've given Twitter a good thrashing, will Dead Tree Edition do an IPO? A: Yeah, right. Wanna buy some shares?
• Q: Will Dead Tree Edition start showing up in Google News? And will search engines start giving higher rankings to articles on Dead Tree Edition than to excerpts and quotations of those articles on other Web sites? A: You obviously don't understand how the search-engine gods rule the www.world. They judge an article on Dead Tree Edition to be the unreliable work of an obscure, anonymous blogger. But when those same words appear in a newspaper or an industry Web site, they suddenly become imbued with authority.
• Q: Is it true you almost wrote an article about how certain famous white people could help save forests? A: Yes. I read that the U.S. Department of Agriculture was releasing parasitic WASPs into the Chicago area to stop the spread of emerald ash borers that were killing trees. Finally, I thought, here's a real job for Prince Charles to do while waiting for Mum to, you know. And this could even give Paris Hilton a chance to do something useful. Then I realized that the article was talking about parasitic insects, not parasitic White Anglo-Saxon Protestants. Oh well. I still wonder what happens to the wasps after they eat all the ash borers. Maybe they buy mini-vans and join the local country club.
• Q: If you're so influential, why do members of Congress and most news media still insist that Obamacare was paid for partly by closing a $23 billion loophole for black liquor -- a loophole that you repeatedly said never existed? A: Alleged influence in the forest products industry doesn't carry much weight on Capitol Hill or with the news media. 
• Q: How did you end up ranked ahead of Williams, whose company probably had much to do with preventing the early demise of the U.S. black liquor tax credit (despite your attacks on the program) and then became the #1 recipient of Canada's version of the credit? A: Good question. I guess Domtar employs more voters in Maine and Canada than I do.
  

Other, barely relevant articles about D. Eadward Tree and Dead Tree Edition include:

• D. Eadward Tree Unmasked! A top U.S. Postal Service executive was revealed to be the man behind Dead Tree Edition.
• Dead Tree Makes the AP!
• Can You Trust an Anonymous Blog with an Aggravating Name? Not everyone thinks Dead Tree Edition should be taken seriously.
• Dead Tree Edition's Best of 2009, which will help you understand why I'm especially happy to be ranked ahead of Twitter (as will Twitter vs. RSS: So Much for Superior Technology).

Groundwood Paper's Carbon Footprint Much Lower Than Freesheet's, Study Says

Uncoated groundwood paper has less than half the carbon footprint of uncoated freesheet paper with the same purpose, a recent study by Canadian researchers suggests.

Not only does groundwood paper use fewer trees, but it also requires virtually no harmful chemicals to make and releases far less methane -- a greenhouse gas – when landfilled, the two Université de Montréal researchers found.

The researchers conducted a “cradle-to-grave” environmental assessment of AbitibiBowater’s Equal Offset groundwood paper in comparison with similar-quality uncoated freesheet (UFS) papers made at mills in Quebec and the U.S. South. None of the products studied contained recycled content.

The research report and accompanying fact sheet said that life cycle assessments of Abitibi’s other UFS-substitute products would probably yield similar results as Equal Offset. Abitibi markets the products as a lower-cost replacement for freesheet papers in such uses as direct mail and books.

Abitibi commissioned the independent, peer-reviewed research. Abitibi’s involvement may lead to charges of bias, but the notion that papers made with mechanical pulp are greener than those made with kraft pulp is not exactly a novel concept

“It was found that Equal Offset emits only about 38% of the greenhouse gases associated with the production of UFS over its life cycle,” the report says. “EO is made with mechanical pulp, which has a high yield, and is bulkier than freesheet made from chemical pulp, thus using fewer trees for the same area of paper.”


Methane Gas Emissions
The researchers calculated that more than 40% of UFS’ carbon footprint fell into the “End of Life” category, mostly from the release of methane as the paper degrades in landfills. (Yes, paper can be recycled, but there’s a limit to how many times wood-derived fibers can be recycled before they become unusable and end up in the waste stream.) UFS’ End of Life greenhouse-gas emissions were about seven times that of Equal Offset, they said.

“According to studies of methane generation in anaerobic landfills reported in the literature, products made of mechanical pulp, such as newsprint, degrade much less than office paper made of chemical pulps. This is thought to be due to non-reactivity of lignin in the decomposition reactions, as well as ‘protection’ of some of the cellulose. Further analysis by the US EPA estimates that 85% of the carbon in newsprint remains intact, compared to only 12% in office paper,” the report says.

The study looked at 15 different “environmental impact parameters”, not just carbon footprint. “The study considered a full range of inputs and outputs throughout the product life cycle, and the results were compelling” – Equal Offset’s impact was lower in 14 of the 15 categories, dramatically lower in some cases.

The UFS products used chemicals like sulfur and sulfuric acid in the pulping and bleaching process, as well as more starch (requiring farmland for growing potatoes and corn), according to the report. They also consumed more fossil fuel, partly because the Alma, Quebec mill that makes Equal Offset uses 95% hydro-electric power.

If the researchers’ conclusions are accurate and applicable to paper products in general, they suggest that a 100%-virgin groundwood paper is more environmentally friendly than a freesheet with 30% post-consumer waste – assuming no significant differences in the forestry practices that generated the virgin fiber.

And they confirm that the $8 billion or so that the U.S. government shelled out in black-liquor credits last year from a green-energy program actually did environmental damage not only by discouraging the use of recycled fiber but also by subsidizing freesheet products at the expense of groundwood.

For more articles about the difference between papers made with kraft pulp (freesheet) and those made with mechanical pulp (groundwood), please see:

• Pulp Fiction: Eco-Credits for Black Liquor: "Mechanical pulp is usually considered environmentally preferable to kraft because it uses fewer trees and causes less pollution."
• The Yellowing of National Geographic: Will Today's Copies Age Faster Than That Stack in Your Gramma's Attic? A disadvantage of groundwood papers is that they degrade faster than those containing only kraft pulp.
  
  

That Was Quick!

Here's proof that someone at L'Enfant Plaza is reading Dead Tree Edition: The erroneous Postal Service Web page I wrote about yesterday was corrected early this morning.

An alert commenter notified me at 4:53 a.m. Eastern time that Susan Plonkey had replaced the disgraced Robert F. Bernstock on the list of USPS executives. That was about 14 hours after the article was posted and about 12 hours after it started being cited by influential sites like Postalnews.com.

The USPS Web site had not been updated when I checked it a few hours before the comment came in, so someone at Postal Service headquarters was obviously burning the midnight oil. Or maybe Bernstock's buddies who got the "Web modernization" contract outsourced the work to Asia.

Now let's hope USPS officials are paying attention to more important issues addressed by Dead Tree Edition, such as the costs of "automation refugees" and employees' difficulties in getting accurate estimates of retirement benefits.

Bernstock Gone But Not, Um, Quite Gone

More than two weeks after Robert F. Bernstock left the U.S. Postal Service under a cloud of scandal, a USPS Web site still lists him as a key executive.

Just as the controversy was heating up over Bernstock's awards of sole-source contracts to former business associates, Postmaster General Jack Potter announced last month that Bernstock would be quitting on June 4.

Federal Times' investigations early this year revealed four different occasions where Bernstock awarded a total of $5.8 million in questionable contracts. The USPS Office of Inspector General took up the case shortly before Bernstock's resignation for the euphemistic "to pursue other opportunities in the private sector." (Today's management tip: If you don't want everyone to know that you made someone walk the plank, don't use the "pursue other opportunities" in the resignation announcement.)

Before Bernstock was even out the door, Susan M. Plonkey was named to succeed him. But it's still Bernstock, not Plonkey, who appears on the list of the USPS's 10-person executive committee on a USPS Web page.

One of the controversial sole-source contracts was for "Web site modernization". Perhaps Bernstock's cronies decided that Web site modernization did not include keeping information up to date.

Please see That Was Quick! for an update on this article. 

NewPage Does The Curley Shuffle

When a corporate CEO leaves after only four months on the job and the chairman quits on the same day, you can bet that something is afoot. But what exactly is going on at NewPage is still a mystery two days after the big paper maker announced a shakeup at the top.

NewPage announced the resignations Tuesday of CEO E. Thomas Curley, Chairman Mark Suwyn, and HR chief Michael Edicola and the hiring of Robert Nardelli as non-executive chairman. Nardelli, who headed The Home Depot when its stock tanked and then led Chrysler into bankruptcy reorganization, is #17 on Portfolio.com’s list of the “worst American CEOs of all time.”

The announcement and a subsequent conference call with stock analysts provided little insight into the departure of Curley, who came to NewPage on Feb. 10 after heading Rolls-Royce Energy. The price of NewPage’s bonds dropped more than 2% on Tuesday, resulting in a yield of 14% and indicating Wall Street's queasiness with the shakeup.

Nardelli made this cryptic statement, according to the Dayton Daily News: “The board of directors basically saw a unique moment in time for NewPage and the paper industry. The board felt we needed to move expeditiously and expedite the pace of change to make sure NewPage comes out of the recessionary period stronger, more formidable with sustainable, reliable and predictable performance."

NewPage announced a CEO search, which indicates that Curley’s departure was unexpected and that a replacement wasn't waiting in the wings.

It’s no secret that the heavily leveraged NewPage has struggled amidst the recession and overcapacity in North American coated paper. Last month, it withdrew its two-year-old application for an initial public stock offering.

But NewPage was in trouble before Curley came on board. It restructured its debt last year in a way that Standard & Poor's called “tantamount to a default,” and three vulture funds had been buying its bonds in an apparent bet that they could take over when the company collapsed. The IPO cancellation seems to have been a bow to the inevitable.

With coated markets tightening, prices finally rising, two competitors shutting machines (apparently with NewPage’s help), some patching up of relations with current and former customers, and the anti-dumping case against Asian producers progressing, things seem to have gone about as well as could be expected during Curley’s brief tenure.

One clue to Tuesday’s announcement is that Nardelli is a “Cerberus guy,” while NewPage was Curley’s first gig with the big hedge fund. Like NewPage, Chrysler was controlled by Cerberus, and Nardelli is CEO of Cerberus Operating & Advisory Co.

Other recent articles about NewPage:

• Downsizing Has Made NewPage A Low-Cost Producer 
• Is Domtar's Exit a Game Changer for Coated Paper?  
• A 'Salmon Week' For North American Papermakers, which explores why Curley's predecessor might have quit in January.

USPS To Give Publishers a Break on Ride-Alongs

The Postal Service has decided to liberalize the “ride-along” rules that have  prevented product samples and certain other advertising gimmicks from running in U.S. magazines, sources said today.

The new regulations would reduce the postal cost of many of those advertising pieces by 90% or more.

To understand the significance of the change, note the recent cover of an L.L. Bean catalog, which includes a small fabric sample on the first page that pokes through a die-cut hole in the cover, with an invitation to "feel the softness." Bean has used such fabric samples several times in its catalogs, but never in its magazine advertising.

The reason is simple: In a Periodicals-class mailing, the fabric sample would be considered a ride-along, for which the Postal Service charges 16.5 cents apiece. But the only postal charge for putting the fabric sample into the Bean catalog (Standard class mail) was a bit of additional weight, resulting in a postage cost of only a tiny fraction of a cent per catalog.

One source said the decision by postal officials, which will supposedly be spelled out soon in the Federal Register, was announced at an Idealliance postal seminar in New York today. Many items now subject to ride-along charges will instead be treated like regular advertising pages in magazines or newspapers, though CD’s will still be charged ride-along rates.

The idea behind ride-along rates was to prevent Periodicals from being used to cannibalize other, more profitable classes of mail. But the high price and the limit of one ride-along per publication have blocked many high-impact advertising ideas that included seed-impregnated paper, band-aids, refrigerator magnets, and small product samples that would have virtually no impact on the Postal Service’s costs.

See Postal Service May Boost Ride-Alongs for more information about the thinking behind ride-along liberalization and what it might entail. And Catalog Prospecting: Thar's gold in them thar pages notes L.L Bean's use of magazine advertising to prospect for new customers.

Federal Subsidy For Green Printing To Be Proposed

A prominent print-buying organization is about to propose legislation that would provide U.S. government subsidies for “green” printing – an interesting idea that could lead to even more interesting debates.

Here’s an excerpt of a message that Suzanne Morgan, president and founder of Print Buyers Online and a well-known commentator on print-buying issues, sent Friday to PBO’s email subscribers:

"On July 19, 2010 at the ninth annual Print Oasis Print Buyers Conference in Washington, DC, Print Buyers Online.com will be unveiling legislation that will be presented to Congress starting on Wednesday, July 21 that can save your company hundreds of thousands of dollars a year or more on print. This legislation proposes that any print project that is bought in an environmentally sustainable way is eligible for refunds of state sales taxes by the Federal government.

"To determine the cost savings for your company, you only need to calculate the percentage of print jobs that meet sustainable standards (can be recycled, include 15% or more PCW, are printed on paper that is legally harvested, etc.) and then calculate the sales tax of those jobs, to appreciate the enormous cost-savings."

Any effort to define what constitutes sustainable printing that is eligible for a federal subsidy (let’s not mince words: a tax rebate is a subsidy) would kick up huge arguments among printers, manufacturers, print buyers, and environmentalists.

A requirement that the material be recyclable should favor paper – until the plastics-industry lobbyists jump in and start arguing that various plastic substrates are, at least in theory, recyclable.

Is paper with 15% post-consumer waste green if the other 85% comes from the clear-cutting of tropical rainforests? Should the new law follow the government’s purchasing standards, which consider sawdust to be post-consumer waste but unsold magazines to be pre-consumer waste? (Most other countries, by the way, don’t distinguish between pre-consumer and post-consumer recycled content.)

Almost everyone agrees that making paper with recycled pulp is great if it diverts waste from a landfill. But what if the result is upcycling – diverting low-grade waste paper from its most efficient use, such as making newsprint or cardboard, to the manufacture of high-quality papers? (Paper industry analyst Verle Sutton calls North American recycled newsprint mills “an endangered species” because recycled pulp prices have been bid up so high.)

Should virgin fiber come only from certified-forestry operations? If so, which certification standards are acceptable? Imagine the battle between the Forest Stewardship Council and the Sustainable Forestry Initiative over that one.

And what about carbon footprint? Should the law favor paper made at mills that use hydropower or biomass or products produced at wind-powered printing plants?

Must ink contain soy to be environmentally friendly, as some claim? Or are other inks even better because they contain higher levels of other renewable material, as others claim?

Even defining printed matter could be challenging. Wallpaper, linoleum flooring, T-shirts, and electrical circuits can all be printed. Procter & Gamble recently revealed that it prints an absorbent gel onto Pampers with Dry Max diapers. (I tried to find out what printing process was used but couldn’t get to the bottom of it.)

Ms. Morgan and PBO deserve kudos for trying to encourage environmentally friendly printing. If only we could all agree on exactly what that means.

For related articles, please see:

• I'm an environmental idiot! explains the problem with up-cycling.
• Students Lecture Al Gore on Green Printing
• The Great Forest Certification War describes a legal and PR battle between supporters of the Forest Stewardship Council and the Sustainable Forestry Initiative. 

Comments to PRC Favor 5-Day Delivery

A majority of the people who contacted the Postal Regulatory Commission in April and May about ending Saturday mail delivery favor the proposed change, the commission revealed today.

The commissions’s staff categorized 2,116 comments as “OK with change in service” and 1,691 as “opposed to change in service,” according to a report released today. Nearly 10% of the respondents favored delivery of four or fewer days.

Public opinion polls also indicate a slight majority of people favor eliminating a day of delivery rather than raising postage rates to address the Postal Service’s financial problems. Still, the 56%-44% edge for five-day service in the PRC comments is surprising.

After all, postal workers who might lose their jobs and certain businesses that depend upon Saturday delivery have huge incentives to take the trouble of contacting the commission. It's almost always easier to rally people around maintaining a public service and saving jobs than it is to get them excited about cutting costs.

The opposition to five-day delivery seems better organized and passionate than the proponents, as evidenced by a union announcement that nearly half the House of Representatives has signed a non-binding resolution supporting six-day delivery. It shouldn't be hard for postal unions that oppose the change to rally thousands of members to contact the PRC.

Perhaps June's statistics will tell a different story.

Postal Service Chooses "Un-Intelligent" Mail

Why do Postal Service officials sing the praises of the Intelligent Mail barcode and then not use it on their own mailings?

An alert reader sent me this scan from her recently received copy of USA Philatelic, a quarterly catalog that the U.S. Postal Service sends to stamp collectors. She says it's the second time she's noticed that the catalog used an old-fashioned Postnet barcode rather than an Intelligent Mail barcode for her address.

She also noted that the catalog was sorted as "auto 5-digit" even though almost all of the Standard-class flat mail that comes to her is carrier-route sorted, which is less expensive for the Postal Service to deliver. That indicates the catalog was not co-mailed, or at least that it wasn't in a decent-sized co-mail pool. (Cenveo is the printer.)

An Intelligent Mail barcode (also known as a FUBAR code) has four types of bars that enable it to contain more information than "unintelligent" barcodes that have only two types of bars. In theory, an IMb can uniquely identify each piece of mail. Next year, mailers will be forced to use IMbs to obtain automation discounts.

The new barcodes have proven difficult to reproduce with the kind of high-speed inkjetting equipment typically used to address catalogs and magazines. And USPS equipment doesn't always read the codes correctly. The program has also been plagued by inadequate training, procedures, and systems.

Perhaps the folks at the Postal Service who are in charge of the catalog decided that using Postnet codes was the base way to get the copies delivered correctly.

For more information about problems with the Intelligent Mail program, please see:

• Full-Service Intelligent Mail? Forget About It, Postal Expert Says 
• Intelligent Snail: USPS Finally Addressing Crossed-Out Barcodes
• USPS: Ve Haf Vays of Making You Use Our Barcode 
• Watch out! It's the IMb Express! 

The Theater Ad That Was Banned In Philadelphia

As a public service and discussion starter, I'm posting information about an ad that The Philadelphia Inquirer's Philly.com Web site supposedly refuses to run from a reputable theater company because it contains the word "pedophile".

Nice People Theatre sent out the following email today about the ad for the upcoming opening of the play "Love Jerry":

"Love Jerry" opens on Friday and is a truly stunning and remarkable thing to see.

We were very excited to take out an advertisement online at philly.com with a wonderful little video advertisement we dreamed up. We had negotiated the price and placement and everything was good to go until...

THEY SAW THE WORD 'PEDOPHILE'

That's right, folks. Philadelphia's major news outlet refused our advertising dollars because of the word pedophile and suggested we replace the word. But no other word was satisfactory to them - they censored our ad for fear that people would click on the play button to watch our ad and think that they were condoning pedophelia. That is just crazy, especially coming from a website that takes ads for local stripclubs. So....

...we have a plan that will benefit you and show them how advertising really works!

1. WATCH THE CONTROVERSIAL AD HERE

2. FORWARD IT TO EVERYONE YOU KNOW

3. COME SEE LOVE JERRY AND TELL THE BOX OFFICE,

"I FORWARDED YOUR AD"

4. WE'LL GIVE YOU $2 OFF OF YOUR TICKET

5. IF WE GIVE 50 PEOPLE $2 OFF WE WILL DONATE THE $800 WE WERE GOING TO SPEND ON THE AD TO OUR FRIENDS AT THE CHILD ABUSE PREVENTION EFFORT.

(We would've needed to sell 50 tickets from the ad to break even so it seems fair that if you do the advertising for us, we'll still shell out the cash)

So what do you think, folks? Should an ad be banned from a publisher's Web site simply because it contains the word "pedophile"? Which is worse, the typical strip-joint ad or a tasteful one for a work of art about pedophilia? And will Dead Tree Edition get dinged by the search-engine gods for mentioning "pedophilia," "strip clubs", and "video" all in the same article?

Downsizing Has Made NewPage A Low-Cost Producer

In less than three years, NewPage has gone from talking about its high-cost coated paper machines to bragging about its low-cost position.

“As of March 31, 2010, 90% of our non-specialty coated paper machines were in the top 20% of efficiency of all non-specialty coated paper machines in North America, Europe and Asia based on the cash cost of delivered product to Chicago, as reported by RISI,” the company said in a filing with the U.S. Securities and Exchange Commission late last week.

“We believe our scale and efficiencies are unmatched within the industry,” North America’s largest producer of coated paper said in the document.

Its cost-per-ton advantage in the past couple of years has ranged from 8% ($49 per ton) when low pulp prices helped non-integrated producers, to 14% ($84 per ton) when pulp prices were high, NewPage’s filing said. The company did not specify the grade of paper it was describing, but the reference to non-integrated producers (those who must buy their pulp) suggests it is coated freesheet (CFS).

As they prepared in late 2007 to buy Stora Enso’s North American operations, NewPage executives put out the word that they would soon own a disproportionate share of the continent’s smallest (and therefore highest-cost) paper machines. Rather than letting market weakness drive down prices, they said, they would idle their high-cost machines to keep the market in balance.

Sure enough, NewPage shut down six paper machines during 2008, and coated prices rose gradually for most of the year. But when excess capacity started causing prices to crash just over a year ago, NewPage stated publicly that it had no more high-cost machines to shut down. (See NewPage Turning Over a New Page: No More Shutdowns.)

With competitors slow to respond with their own market-stabilizing shutdowns, NewPage took a more active tack this year: It bought out Domtar’s coated-groundwood (CGW) business, which ensured that the company’s only coated mill would remain idle, then reportedly did a similar deal with Kruger last month to help its Trois-Rivieres, Quebec mill exit CGW. (See NewPage Reportedly Has Deal For Kruger's Idled Machines, which, by the way, has not been confirmed or reported by other media -- or denied by the two companies.)

Other interesting factoids and statements in the NewPage filing include:

• "We have substantial indebtedness. As of March 31, 2010, we had $3,150 million of total indebtedness and we have up to $410 million available for borrowing under our Revolver."
• "For the year ended December 31, 2009 and the quarter ended March 31, 2010, earnings were insufficient to meet fixed charges by $363 million and $175 million, respectively."
• Annual production capacity on its 20 machines is about 3.2 million tons of coated paper, 1.0 million tons of supercalendered paper, and 200,000 tons of specialty paper. In 2009, 58% of the coated paper was CFS and 42% CGW.
• “Our largest customer, xpedx, a division of International Paper Company, accounted for 19% of 2009 net sales. Our ten largest customers (including xpedx) accounted for approximately 50% of 2009 net sales.” Other “key customers” are Condé Nast, McGraw-Hill, Meredith, News America, Pearson Education, Rodale, Time, Quad/Graphics, R.R. Donnelley, Worldcolor, Sears, Williams-Sonoma, and paper merchants Lindenmeyr and Unisource.
• “For the year ended December 31, 2009, we produced approximately 94% of our pulp requirements, which excludes our sales of market pulp, with the remainder supplied through open market purchases and supply agreements.” NewPage sells some hardwood pulp to other companies.

For more insight into NewPage, please see:

• Are NewPage and Verso Headed to the Altar?: A "vulture trio" of hedge funds that own rival Verso is trying to take control of NewPage by buying up its debt, a published report said in March. NewPage's filing says that Cerberus Capital Management is still in the driver's seat.
• "Black Liquor" Credits Are Helping Paper Buyers: Though NewPage raked in more than $300 million last year from black liquor tax credits, it says the loophole distorted the market and drove paper prices down.
• Is Domtar's Exit a Game Changer for Coated Paper?: More on the NewPage-Domtar deal.