Recycle This Paper -- Old Newsprint Is A New Industry For Pulp Mills

CUTLINE: VIC CONDIOTTY / SEATTLE TIMES, 1988: SEATTLE RESIDENT DIANA DEVEREAUX IS AMONG THE THOUSANDS WHO RECYCLE NEWSPAPERS THROUGH THE CITY'S PROGRAM

In the hazy light of the Recycle America warehouse in the Duwamish industrial area, trucks back into mountains of old newspapers and dump avalanches of yesterday's news on the floor.

Once sorted, bundled and stuffed into shipping containers, the newspapers are shipped to Asia or Oregon to become newsprint and newspapers all over again.

This is how newspaper recycling is supposed to work, and it's still working in Seattle.

Observers from other cities are coming here to see the program because recycling is not working for them. In other parts of the country, there is a glut of newsprint as recycling programs far outpace the construction of mills to handle the newsprint.

Why does it work here but fail elsewhere? Seattle is helped by demand for old newspapers from Asian export markets and the proximity of an Oregon recycling mill that is one of the nation's largest recyclers.

Also, the city doesn't sell to recyclers. It pays them about $49 a ton to pick up recyclables, including newspapers. When compared to the cost of dumping these recyclables in landfills, the city's program is pretty much breaking even, says Jenny Bagby, an economist with the city's solid-waste department.

But Seattle recyclers haven't fared so well. The firm that collects recyclables north of the ship canal, Recycle America, says the glut of old newspapers has driven prices to half what they were in 1988, when the program began.

In the middle of the newsprint recycling chain are the pulp mills. Generally, the mills were caught completely off guard by the demand for recycled newsprint, which is newsprint generally containing 25 percent to 40 percent recycled fiber.

``It came on very, very rapidly . . . during 1989,'' says Charles Widman, a Canadian forest industry consultant. When his firm prepared a forecast for a pulp mill in the fall of 1988, he recalls, there was no indication of the coming demand for recycled newsprint.

Part of the surprise came from the cyclical nature of the pulp industry. About the time the newspaper glut became a problem, and requests for recycled newsprint started coming in, the pulp industry was coming off one of its periodic peaks.

There are no mills manufacturing recycled newsprint in Washington, although that is about to change. Longview's NORPAC mill, a joint venture between Weyerhaeuser and a Japanese firm, Jujo, is scheduled to start turning out recycled newsprint in April 1991.

The closest recycling mills to this area are owned by Smurfit Newsprint Corp., which has two mills in Oregon, in Newberg and Oregon City. Another major facility will begin operating in Ontario in July.

It's not a market the mills are especially anxious to jump into, although they may have to as the marketplace changes and newspapers start demanding more recycled newsprint. Building a complete recycling facility costs around $300 million to $350 million.

Saul Yaari, a forest-products analyst with Piper, Jaffray & Hopwood, a regional brokerage firm, believes recycled fiber will be a large percentage of the newsprint in the future, ``maybe up to 40 percent of the total fiber requirement in North America by the end of the century.''

If that happens, it will be largely the work of states and municipalities that are beginning to mandate use of recycled paper.

In Washington, three bills were introduced in the House and Senate to either strongly encourage or to require newspapers to use a certain percentage of recycled stock in the newsprint they buy. One bill, sponsored by Jack Metcalf, R-Langley, asks the newspaper industry to make sure that 25 percent of the newsprint it uses comes from recycled stock, while another, sponsored by Patty Murray, D-Shoreline, uses that percentage as the base for a sliding figure that requires newspapers to use 50 percent recycled newsprint by 2000, subject to certain provisions, such as availability.

No paper drive

Murray said her interest was triggered in part by the predicament of her daughter's school, which this year is not holding a paper drive because prices are low due to the newspaper glut.

``If that's the trend in the state,'' she says, ``people are going to stop collecting and have it sit in garages and landfills.''

Still another bill, sponsored by Rep. Art Sprenkle D-Snohomish, seeks a middle ground by setting out voluntary guidelines but providing for the state Department of Ecology to prepare requirements for mandatory use if the voluntary approach doesn't work.

Meanwhile, the California legislature last year passed a bill requiring 50 percent recycled newsprint in newspapers by 2000. Because California consumes a big chunk of the nation's newsprint, the law was seen as a turning point.

Before, a stalemate existed. Mills were reluctant to add recycling facilities because they were unsure there would be sufficient demand. And newspapers insisted they were willing, even eager, to use more recycled newsprint but couldn't get their hands on it.

``The California law broke the chicken-and-egg thing,'' says Jeff Marshall, executive director of the Pacific Northwest Newspaper Association, which represents publishers in six Western states.

``It created a known demand for recycled paper, and the manufacturers knew they could go ahead and put in the facilities.''

Other states, including Connecticut, have passed laws requiring a percentage of recycled fiber in newspapers, and Florida has begun levying a tax on virgin newsprint and a tax credit for recycled newsprint.

Newspapers disagree

Meanwhile, the proposed legislation here has sounded alarms in newspaper executive offices across the state. The newspapers say they don't need mandatory legislation, don't want it and can't get recycled newsprint right now, no matter how hard they try.

Mandatory requirements aren't necessary, they argue, because about half the newspapers in Washington already are being recycled. That rate is higher than in any other state except Oregon.

When the NORPAC mill begins operating, it's going to need more used newspapers for recycling than the state now produces, says Rowland Thompson, executive director of Allied Daily Newspapers of Washington, which represents daily newspapers.

When the problem of getting recycled newsprint is solved, newspapers will use it, Thompson says.

``The problem is almost going to go away once the NORPAC mill comes on line,'' says Thompson. ``They're going to suck up everything in sight,'' he says, and probably will have to import used newspapers from out of state to meet demand.

Newspapers view proposed regulations as a potential source of paperwork, legal wrangling and bureaucratic busy work.

``No one's against the concept of buying recycled paper,'' says PNNA's Marshall,

noting that the quality of recycled paper no longer poses a problem, and prices are comparable. ``As a matter of fact, a lot of the papers are pushing hard to get it.''

Times expects 30%

The Seattle Times is adding more recycled newsprint to its mix and, once the NORPAC facility gears up, expects about 30 of the newsprint it uses will contain recycled fiber, says H. Mason Sizemore, Times president and chief operating officer.

Sizemore is in charge of buying newsprint for The Times and the Seattle Post-Intelligencer, which together account for about half of the newsprint consumed in this state. Currently, about 2 percent of the newsprint The Times and P-I consume contains recycled fiber.

Sizemore wrote suppliers a year ago, warning them that they needed to add recycled newsprint to their line if they were to retain The Times' and P-I's business. Recently, another major supplier to The Times and P-I, Fletcher Challenge Paper Co., announced it would provide recycled newsprint by mid-1991.

``We've made no secret (of it) with our suppliers,'' Sizemore said. ``If we can't get recycled newsprint from our traditional suppliers, we're going to change suppliers.''

Meanwhile, industry groups are looking into new uses for old newspapers, besides newsprint. Other uses include cat litter, insulation and paperboard for use in cereal and shoe boxes. And in Eastern Washington, old newspapers are being turned into fruit-box liners.

But Ray Hoffman, executive director of Washington Citizens for Recycling, finds little to cheer about in figures showing that Washington recycles about half of the newsprint it uses.

``That means half (of the newsprint) still is burned, is going into landfills,'' he says. And that half remains ``a significant portion of the waste stream.''

Hoffman - along with polluting industries that have been the subject of negative newspaper editorials - says the newspaper industry has been hypocritical and slow to act on its own pollution problem. ``They're very good in their editorials in terms of supporting curbside recycling,'' he says. ``But they haven't been on the forefront in terms of setting personal examples.''

Weighing the choices

Meanwhile, pulp mills are weighing the pros and cons of adding recycling to their facilities, wondering if the capital investment is necessary to their longterm survival. With so many projects starting - one analyst says more than 60 wastepaper processing projects have been announced in the U.S. and Canada - they are trying to figure out if sufficient supplies of used newspapers will be available, at reasonable prices, if they invest in recycling operations.

But as newspapers demand recycled newsprint, suppliers may have to make the jump just to survive. Legislation will force them to change, says Yaari of Piper, Jaffray & Hopwood. And the sooner they do it, the better.

``Companies that quickly establish themselves as recycled paper suppliers will generally enjoy stronger operations and incremental market share compared to companies that do not,'' he predicts.

Yet, Yaari and other industry experts expect the current glut of used newspapers in search of recycling mills to continue for about three more years, when it will start to abate as more mills that can handle recycled newsprint come on line.

But the switch will be hard on the mills, says Ross Hay-Roe, a Vancouver, B.C. forest industry consultant. When most of the mills are demanding old newspapers, the prices of old newspapers will rise. Then mills will have to be paying higher prices for their ``raw material.''

Mills will find themselves with myriad new variables to deal with. For example, most mills are near their traditional source of supply - forests. The new source of supply will be cities, so getting the supplies to the mills will involve some changes.

This situation will give Canadian mills, in particular, a massive headache. Ninety percent of Canada's newsprint heads south, across the border.

``Canada is going to have to import old newspapers from the U.S. to produce enough newsprint to meet the (demand),'' Hay-Roe says.

As the recycling mills come on line and demand for old newspapers rises, collection programs will have to rise to meet the challenge, industry experts say.

``It looks like the collection system will have to expand dramatically'' to meet demand in the next five years, says J. Rodney Edwards, vice-president of the American Paper Institute's paperboard group.

Getting enough used papers may well call for municipalities to intensify and refine existing procedures, or initiate new programs.

The demand for old newspapers, however, will be great news for schools and Boy Scout troops that traditionally have relied on paper drives to fund their activities.

And it may mean that kids - like Rep. Murray's daughter - may get a chance to bundle up old newspapers and make money from recycling, real soon.