Jeffrey Sax once said, “The US is out of melody.” I happen to think harmony is a better word, but he’s right, now more than ever. I see it in our industry. I see it in government policy, and I see it in private initiatives. We are out of harmony.

Are you familiar with black liquor? No, it is not black market, tax-free booze. Some of you may have tasted it. Suffice it to say, you’re lucky to still be with us. Black liquor is the spent pulping liquid after the alkaline pulping process is complete.

Black Liquor
It is separated from the pulp in brownstock washers. It contains both dissolved organic compounds from the wood and original cooking liquor. After the washers, dilute black liquor is concentrated and burned to recover the inorganic chemicals for reuse and to provide energy for mill processes.
– TAPPI Dictionary of Paper, 5th Edition

The point of this definition is that black liquor can be used for energy. This is not a new concept. The paper industry has done this for years.

Here’s what is new and this is the conundrum: The alternative fuel provision in the 2005 Transportation Bill could provide more than $6 billion in tax credit payments from the IRS to kraft pulp manufacturers this year. Already, International Paper (IP), the world’s largest pulp and paper manufacturer, has been paid $70 million for one month for using alternative fuels at 15 of its kraft pulp mills. After the arithmetic, analysts estimate IP could receive tax credits of over $1 billion this year. And that’s just IP. All the other paper and board manufacturers are climbing on the gravy train. I am sure this is not what the administration had in mind with the alternative fuel credit, particularly since the industry has been using black liquor for years without getting credit. Crazy or not, it’s happening.

Here’s the other, little known issue that gets me madder than a hornet: The tax credit provision allows kraft mills to blend small amounts of diesel fuel into their black liquor stream to fire their recovery boilers. This is lunacy. The whole concept of the alternative fuel credit is to get away from fossil fuel, not to embrace it. As a result of this bonanza for the paper industry, at least two container board mills have switched from recovered paper to using wood chips. These two mills combined have cut consumption of OCC (old corrugated containers) by 400 tons a day in favor of chips for producing either liner or medium. In other words, use virgin, not recycled, and get a tax credit! This is exactly what we do not want. Talk about the lack of harmony.

In the private sector we have an activity that may benefit investors, but it is as invasive as strip mining. Chris Johns, editor in chief of National Geographic magazine, quotes an old Chinese proverb: “There is no feast which does not come to an end.” This is apropos of the decline of conventional oil reserves and the cost and disruption of alternative extraction methods for hard to find oil. The “mining” of oil sands is a bit similar to the money we’re spending trying to bury carbon dioxide two-plus miles deep into the earth’s surface at a cost of millions. Whether it is oil sands or trying to bury CO2, we should be focused on alternative fuel technology rather than these disruptive, questionable, incredibly expensive activities. Back to harmony: How do you balance the growing needs and demand for energy with environmental exploitation?

There is a huge Canadian initiative to harvest oil from the sands of western Canada. After processing, the crude oil is piped across the border to the largest Canadian customer, the American refinery industry. Today, the US gets more oil from Canada than any other foreign supply. Much of it comes from the oil sand region in western Alberta, an area called the Athabasca Valley. To extract one barrel of oil from one of these surface mines, the industry cuts and clears trees, removes about two tons of peat and dirt from the surface, and finally takes two tons of the sand for processing. The pictures that I have seen remind me of the damage that occurred when International Nickel strip mined for nickel in the Sudbury, Ontario, area. Absolutely devastating; the “after” pictures look like a barren moonscape.

After mining, the sand is taken to extraction plants where bitumen is separated in a high temperature water wash process. The bitumen is then sent to an upgrading facility that converts it to crude oil. The sand, water, and bitumen residues are then piped to a tailings pond where cleaning is supposed to occur. Can you imagine the contamination? Think of this as another Superfund project in the making. Think of the carbon footprint. All of this to satisfy the demand for energy at any cost and an effort by American oil companies to become less dependent on Middle East oil. Where’s the harmony here, one ponders.

Finally, what about our industry dilemma, our waste stream? What are we doing with it? How is each one of us dealing with the huge volume of byproduct? Is it an opportunity or a conundrum? It seems to me that if the paper industry can get tax credits for burning black liquor, and the oil sand industry make profits by destroying the land, at the very least, our industry should get tax credits for diverting PSA waste from landfills. What do you think? It’s not rocket science. Matrix into waste-to-energy makes sense.

Waste-to-energy (WTE) has been virtually dormant for years. The NIMBY (not in my backyard) syndrome put this source of energy on the back burner. There was a flurry of activity about 10 years ago. Then cheap fuel and cheap landfill rates, along with the NIMBY philosophy, killed the activity. Also, environmentalists played a pivotal role in halting growth, as they voiced concerns about emissions. It’s OK to spew emissions from coal, but not from WTE. At any rate, interest in WTE died.

Now there is renewed interest and the political leaders in Washington are considering WTE as an alternative fuel. If this occurs, our PSA waste could receive tax credits. In a report released in January, the Geneva based World Economic Forum listed WTE as one of the eight renewable energy sources that will provide a “meaningful contribution” to a “future low carbon energy system.” (To view the report, visit www.welforums.org, click on the “initiatives” link and then click on the “climate change” link.)

WTE has always been controversial. However, we have much tighter emission control requirements, better cleaning capabilities, and, in general, much more advanced technology than we had 10 years ago. WTE is a logical solution for matrix. Costs should be equal to landfilling and generators will be much closer to a sustainable solution.

The common thread in black liquor, oil sand, and matrix is energy. Of the three, the use of matrix in energy applications is by far the least disruptive and can play a positive role in reducing global warming. The use of matrix in WTE is more harmonious. At least that’s my view from down here.

Another Letter from the Earth.

Calvin Frost is chairman of Channeled Resources Group, headquartered in Chicago, the parent company of Maratech International and GMC Coating. His email address is [email protected].