Paper and Other Absolute Truths Providing Analysis and Perspective Uncommon in Mainstream Media

An incinerator proposed by AbitibiBowater to burn city garbage to provide steam power for the plant would cost $35 million.

“This paper mill is an important part of the history of the Gatineau sector and it affects 350 Gatineau families,” Bureau said. “If we don’t find a solution together it will be too bad.

Around 1990 over $100 million was spent on the mill to convert it from a 100% virgin newsprint mill and allow the  use of recycled fiber.

The Blue Heron Paper Company, in Oregon, is another 100% recycled fiber company in survival mode – actually the company declared bankruptcy earlier this year and is operating under Chapter 11. This mill, in 1989, was also converted from a virgin mill. An excellent review of the difficult issues facing recycled paper producers in general, and Blue Heron specifically, was published in the Willamette Week recently, and was titled Beaten to the Pulp. Some passages will be provided below, but if you have interest in the topic, the entire article is worth your while.

Single stream recycling (also called commingling)  become a factor in the late ’90s. The result has been disasterous for recycled paper producers. The author reports that Blue Heron loses about 5% of the recovered paper it buys due to contamination. I have read other reports that indicate losses can be up to 25%.

The good times would not last forever. A major change occurred in 1999, when Apotheker, who had joined Metro a year earlier, and his colleagues changed a policy and introduced “commingling.”

Up to that point, residents in the Portland metropolitan area played a much more active role in the recycling process than they do today. Cardboard had to be folded and tied and kept separate from newspapers. Tin cans had to be put in a separate container, as did glass and plastic.

Apotheker and his colleagues figured that if Metro could reduce the hassle of sorting at the residential level, people would be more likely to recycle. So, in 1999, residents were told to just put everything except glass in the same tub. Massive warehouses called “materials recovery facilities,” or MRFs, would handle the sorting.

“Of course, our ultimate goal was to increase the recycling rate,” Apotheker says.

The policy worked. The recycling rate in the Metro region, according to the Oregon Department of Environmental Quality, was 43 percent in 1999. By 2001, it had jumped to 49 percent, which was the biggest two-year increase since the state began keeping records. (In 2006, the Metro rate was 55.5 percent.)

Metro was happy with the increase, but for Blue Heron, commingling has been a nightmare.

Blue Heron’s Fletcher, 51, has learned the hard way residents did a far superior job of sorting than do materials recovery facilities.

Today, when scrap paper arrives at Blue Heron’s mill, workers dump it into a 60-foot tube that looks like a supine NASA space rocket.

Inside the tube, called a drum pulper, the scrap is mixed with water and a detergent to remove ink. The drum spins, and heavier, non-paper material falls to one end, where it is caught like dryer lint and expelled.

Since commingling began, the scrap Blue Heron receives contains far more glass, plastic, metal and non-fiber than before.

“A quarter of a percent ‘outthrows’ [non-paper material] was the industry standard in the ’90s,” Fletcher says. “Now a mill in this region is lucky if they get less than 5 percent outthrows.”

Put simply, mills saw as much as a 20-fold increase in the amount of glass, metal, plastic and other junk that came into their facilities.

“Blue Heron is getting lower-quality product,” says Fletcher. “The paper stream is so dirty we can’t use as much as we’d want.”

The decline in quality has real economic consequences, both because Blue Heron is paying for scrap that it can’t use and because it then has to pay to dump the glass, plastic and metal, which is unusable after coming out of the drum pulper.

Based on Blue Heron’s consumption of 500 tons per day, the mill is paying for and then paying to throw away nearly 10,000 tons of unusable trash annually.

At current scrap prices of more than $100 per ton and current landfill rates of about $25 per ton, the extra junk in the scrap stream is costing Blue Heron about $1.25 million annually. (Fletcher won’t give an exact number, saying only it’s “more than a million.”).

In addition to single source recycling, high demand  for recovered paper from China (causing costs of recovered paper to remain elevated) make survival of recycling mills even more challenging than virgin newsprint mills.

“In 1994, the Chinese manufactured 28 million tons of paper,” Grogan says. “In 2006, they made 70 million.”

China is on track to overtake the U.S—where paper production peaked in 1999 at 105 million tons—as the world’s largest paper manufacturer.

“Fifteen years ago, there were about 70 newspapers there,” Grogan says. “Now there are 2,000, and from almost nothing, today you have 9,000 magazines.” And China’s demand is likely to grow, given that per-capita paper consumption in China is still a small fraction of U.S. consumption.

To respond to this demand, the Chinese have built dozens of state-of-the art mills in the past 10 years, most geared to run on recycled paper. Their mills produce paper much more efficiently than Blue Heron’s primary paper-making machine, which is 80 years old.

Chinese mills run on scrap paper by necessity. Although U.N. figures show that China comprises 20 percent of the world’s population, it contains only about 4 percent of the world’s forests.

So Blue Heron must increasingly compete with Chinese mills for scrap paper. One might think Blue Heron would have an edge over China in buying old newspapers from West Coast suppliers, simply because of proximity. Not so.

When Chinese manufacturers export goods to the U.S., they do so primarily in large steel shipping containers stacked like bricks on high-speed ships.

The U.S., however, exports relatively little to China. So empty shipping containers pile up on West Coast docks. And shipping companies are willing to charge almost nothing to anyone who wants to send products to China.

Blue Heron’s Fletcher says that for much of 2007, for instance, shippers could move a container of scrap paper from Portland to China, a voyage of nearly 6,000 miles, for about $300. The cost for Blue Heron to bring that same container from Medford, which is only 220 miles away? About $500.

There was a time when Blue Heron could find all the scrap it needed locally, but with the Chinese vacuuming paper off the West Coast, Fletcher now sometimes buys paper from as far away as Chicago.