International Paper (IP) started the tax credit process during the last quarter of 2008, gaining about $250 million from the credit. During 2009, the company estimates that the full gain will be about $900 million. John Faraci, IP CEO, said this in a recent interview: "The (refund claims) provide important flexibility as the company strengthens its balance sheet [at the cost of the taxpayers] while protecting as many jobs as we can." I'm sorry, I liken this scheme to the US giving billions to AIG, Merrill Lynch, and the other gangsters. The paper industry is in the tank, literally. However, every single pulp and paper manufacturer that has applied for and received the black liquor tax credit (and there are at least 15 at this writing) during the first quarter is able to report a profit.
Just to refresh your memory, the paper industry has been using black liquor as an alternative fuel for years and years, at least as far back as the mid to early 1930s. All of a sudden they've latched on to a provision in the 2005 transportation bill that allows them to earn credits for as much as 50 cents on the gallon for black liquor. I am positive that this loophole will be closed as Obama begins to focus on health care, probably during the third or fourth quarter. In the meantime, the government will have paid out billions, from us, naturally. Obviously, if I'm a pulp or paper manufacturer, I'm gonna grab it. In the meantime, other industries – transportation, equipment, plastics and film, the OEMs in our segment, converters and the like – are hard pressed to operate in the black. OK, you get my point. I'll move on.
Recently, Leggette, Brashears, & Graham (LBG), a groundwater and environmental engineering firm in St. Paul, MN, USA, was asked to develop a process to remove three million gallons of "leachate" from a closed landfill in St. Louis. The process had to be economical and environmentally sensitive.
Leachate is landfill water, waste water that is generated in landfills. It just can't be "run off" into ground water. It is contaminated with solid waste and other matters. Items that could contaminate include flexible packaging waste, PSA waste, matrix, spent liner, you know, that kind of stuff. So leachate is the liquid byproduct of a landfill. It currently goes into settling ponds which have been lined with synthetic liners so the liquid can't leech. (Yeah, sure.) Every landfill has leachate and each one deals with water byproduct in a different manner. Because our byproduct is in these landfills, the development by LBG piqued my interest. Its approach is innovative and environmentally friendly. The LBG process utilizes phytoremediation, a green technology that harnesses plants to treat contaminated waste water. In this process, leachate becomes a resource, not a waste.
If you'll follow me for a minute, I'll try to explain the technology. Leachate is distributed to a phytoremediation system. The phytoremediation process consists of pumping leachate from the landfill to a pre-treatment oxidation system for conditioning. The processed leachate is then distributed via a sophisticated irrigation system to poplar trees (the bamboo of the Midwest) along with water, which eventually goes through evaporation and transpiration, a natural filtration process. The result is the elimination of settling ponds and hauling leachate to other sites, all of which creates more carbon dioxide. A winter leachate distribution system was then developed by laying "drip tubing" below the frost line, allowing for year round distribution. Pumps control the whole process and adjust automatically regardless of leachate composition and flow rate. During the first year of operation no leachate was hauled off site, tree growth was substantial, there was an elimination of hauling and dumping leachate, which obviously results in cost savings and less CO2. This is a win/win and the project was honored recently with a number of awards. It is my understanding that other landfills will be evaluated and considered as candidates for this technology.
We are finally capturing methane from landfills and converting this noxious gas into electricity. With the LBG technology we can use leachate as a resource. I am convinced that the other part of the landfill that includes our byproduct can also find a useful alternative: waste to energy. In fact, in my next column I will introduce a project called Greenwood Fuels, a brand new company mixing matrix with paper mill sludge. Soon there will be another project, in another region, that will essentially offer the same solution for matrix, an alternative to landfilling that is positive and will contribute to the reduction of solid waste in landfills and reduce our byproduct with energy applications.
Let me leave you with one thought: Ultimately, we will have some kind of cap and trade regulation. It's the concept of the carrot and the stick. The carrots are tax incentives (I didn't say tax credits.) for renewable energy sources that do not emit carbon, such as wind, solar, and geothermal. The sticks are punitive taxes for carbon emitting energy sources like a coal fired boiler. It is a mystery as to how all of this will play out. Thank goodness I look at it from afar and am only a messenger to the powers that be.
Another Letter from the Earth.
(Reference: Filtering by Forest, Waste Age, May 2009)