According to conclusions drawn by “The Economist,” U.S. President Barack Obama ranked well below his predecessors in presenting a message of hope and change in his inaugural address. In that speech, Mr. Obama used “hope” three times and “change” once (plus one “changed”). The winner in the last 100 years? President William Howard Taft, in 1909, who mentioned “hope” 11 times and “change” 10. Mr. Obama’s performance leaves him tied for 15th place in the “hope” category and 13th in the “change” category (out of a total of 26 inauguration speeches).
Like it or not, we in the pulp and paper industry are seeing change of an unprecedented magnitude these days. Our change is being wrought by a nonrecyclable element that is extremely plentiful and extremely cheap: sand, the primary ingredient in silicon computer chips. Computer memory and communications technology is running circles around one of our legacy markets: communications papers, or printing and writing papers, of any kind.
Sand-based computers are so cheap they are creating data manipulation opportunities that we can not begin to comprehend. For instance, I understand there are standards being promulgated for aerial video, that to qualify for inclusion in a standardized database (to be used by government and industry) will mandate over 60 individual attributes to be recorded with each frame of video. This is clearly a task only computers can do.
Then, we continue to see small towns with obsolete, idled mills trying to resuscitate them. It was recently brought to my attention that one of these towns recently received a grant to hire a consultant to do a USD 35,000 study to see what can be done with their old mill. This is a public service announcement from me to all small towns: the only conclusion you are going to get from a well recognized consultant for USD 35,000 is probably something like this: “We found some surprising issues; we’ll need to do some more study in order to draw any definitive answers.” This will be accompanied with a proposal in six figures and a schedule from six months to a year. By the time the study phase is done (and you are, charitably, still one or two years away from creating local jobs), many of your citizens will have left for greener pastures.
In the United States, the federal solution for another desperate industry, the auto industry, is to bail it out. Only this bailout comes with strings attached: these companies have to make the kinds of cars the federal government wants them to make. What has not been addressed, however, is what will be done if the public does not want to buy these cars? The public may still sit on its hands, and keep driving what it has. This has been done before -- look at Cuba, replete with oodles of late 1950s U.S. automobiles, still on the road (and they were not nearly as well built as today’s late model units). You can’t make people buy products they don’t want, even in totalitarian societies.
Fifteen years ago, I thought it was going to take 40–50 years to reduce our industry to tissue and packaging, and a new component, energy. I kept to this schedule for a decade. Now, I think I was wrong — by 2020 at the latest, printing and writing will be niche markets. And when I was thinking of energy, I was thinking of burning wood to make electricity, a trend that is indeed happening, it is just being accomplished by electrical power companies, not traditional members of the pulp and paper industry. As for cellulosic ethanol, I am not sure. There are lots of legitimate scientists and lots of crackpots (ethical and unethical) trying to make this work, but it appears no one has the economics right yet, and more importantly, no one can predict the economics. For one has to remember the reason one makes ethanol, which is to make a transportation fuel. Breakthroughs in batteries, hydrogen fuel cells, and other technologies could render cellulosic ethanol obsolete overnight.
So, I keep coming back to cellulose’s material properties as the great hope for our industry. The worldwide penetration of the tissue market is still relatively small and there is no substitute even on the horizon. Packaging grades have not and likely will not be replaced. Cellulose does have continuing opportunities to replace steel and other more expensive materials in certain applications. There is much to look forward to here. And then there is pulp, with uses other than paper or paperboard manufacturing. We know how to make it and the uses just continue to expand.
The good news — packaging and tissue have long-term expansion opportunities as we raise living standards around the world.