Pioneering a Sustainable Paper Industry
By adopting cutting-edge technologies and seeking to eliminate waste and increasing efficiency, Grays Harbor Paper has created a path to not only revive a struggling paper town, but one that also points the way forward for an industry that has only just begun to address its environmental impact. Read More
When Bill Quigg led a consortium of local investors, friends and family to buy Hoquiam’s paper mill in 1993, he wasn’t thinking about what a post-carbon paper business might look like.
“We wanted to put people back to work, and we also thought we could make money doing it,” said David Quigg, director of marketing and Bill Quigg’s son.
At the time, the area was severely depressed. Hoquiam, located in rural Washington near the Olympic Forest about 110 miles southwest of Seattle, takes its name from a Chehalis Indian word that means “hungry for wood.” The county was suffering the economic consequences of federal environmental policy that, in an effort to protect the spotted owl, curtailed logging on public and private lands. Harvests from nearby Quinault-area Forest Service land fell from 96 million board feet in 1978 to 2.5 million in 1998. Unemployment rose above 20 percent for some parts of the ’90s, and Grays Harbor County had the highest suicide rate in the state.
Hoquiam’s paper mill, constructed in 1929 and jointly run by ITT Rayonier and Hammermill Paper, was the city’s largest employer. But it closed in 1992, putting some 650 people out of work in a county whose population exceeds 70,000.
The Quigg family, which had lived in the area for three generations, objected to the government’s solution to the unemployment: training locals to be punch card operators. “We didn’t think that was good enough, so we bought the mill,” David Quigg said.
The Naïve Triple Bottom Line
Grays Harbor Paper, which constitutes about 1 percent of the domestic paper market with $100 million in estimated annual revenues, manufactured under the Weyerhauser brand until around 2000, when it phased out that relationship and began manufacturing under its own name.
With no access to capital and under threat from competition with deep-pocketed multinationals such as Boise Cascade, management started exploring ways to reduce costs and innovate with its product mix in order to stay in business. “What we did early on was save money and try not to pollute here,” David Quigg said. “It was the ultimate naïve triple bottom line.”
For example, rather than run their boiler on natural gas or oil, they converted to biomass to take advantage of their proximity to inexpensive abundant sources of wood-waste that otherwise would be slash-burned or taken to landfill. Instead of buying electricity, they bought two turbine generators to make their own. Earlier this year they added a third with the goal of not only making their own energy but selling it, too. At the end of November, they were generating more energy than they needed. With the capacity to produce more than 17 megawatts, they began talking to Puget Sound Energy and REI about selling renewable energy certificates.
They also kept their eye out for new opportunities. When the state of Washington approached the company about making post-consumer recycled paper, Grays Harbor developed their flagship product, a 100 percent post-consumer paper, of the same quality of virgin paper, called Harbor 100.
These innovations are notable in an industry that’s better known for cutting down trees than being green. Among all U.S. manufacturing industries, the paper industry is the fourth largest contributor to greenhouse gases, according to a report by the Environmental Paper Network (EPN). But what makes Grays Harbor Paper stand out is the sweep of its vision. In a conservative, rural Washington county whose economy was largely dependent on timber for more than 100 years, Grays Harbor Paper has pinned its strategy to building a regional business out of a recycled product with the long-term goal of eliminating the need for fossil fuels from its supply chain.
“We have extra steam, we have land, extra water, extra electricity — all green. We have rail-siding, truck loading and unloading,” David Quigg said. “How cool would it be if we use biomass to make steam and electricity fossil fuel-free, then we make our paper using our fossil fuel-free — Green-e certified paper — then we ship that paper to you on a semi-truck that’s run on Imperium Renewable biodiesel?”
Quigg’s vision doesn’t stop at the supply end of the spectrum, though: he continues, “On the backload of that semi-truck, we work with local recyclers to pick up that recycled consumer paper in the same biodiesel truck, and bring it back to Grays Harbor Paper and a new de-inking facility using fossil-fuel free energy. [We] recycle that paper, make it, ship it, recycle, and totally close that loop here in the West from Vancouver B.C. to San Francisco. We could literally do it fossil-fuel free.”
While Grays Harbor Paper has yet to build a de-inking facility — and close the loop on paper manufacturing — the Quiggs have been active at extending their vision to include the entire community of Grays Harbor County.
A number of companies pursuing green products have sprung up in Hoquiam, including Imperium Renewables, which opened the country’s largest biodiesel production facility next door to Grays Habor Paper in early 2007; and Paneltech International, which makes biocomposite countertops using a formaldehyde-free, cashew-nut resin and paper from Grays Harbor Paper.
Recognizing an opportunity to re-energize the local economy — where in 2006 unemployment rates remained higher than the rest of Washington, at a little more than 7 percent, compared to 5 percent — the Quiggs dreamed of a home-grown “green bubble,” or local green economy. In this vision, a network of manufacturing plants will recycle the waste of neighboring plants into their products, as an industrial ecology, modeled after the pioneering example of Kalundborg, Denmark.
To this end, they have taken a leading role in promoting green practices, such as organizing a training session that attracted 75 local businesses. The company also formed Sustainable Grays Harbor, which is working on Grays Harbor 2020, a visioning process that involves the local colleges, county government, seaport authority, Quinault Indian Nation, and other local groups in creating a sustainable community.
“If people start hearing that Grays Harbor is this eco-industrial hub, then maybe we’ll find other businesses that will take our waste, and we’ll take other business’ waste, and we’ll be this huge, convoluted mess of waste symbiosis right here in Grays Harbor,” David Quigg said.
Why Waste the Oil?
According to the EPN’s State of the Paper Industry report published in early 2007, paper accounts for 25 percent of landfill waste, the largest single component. It’s also a significant contributor to climate change. Forty-two percent of the industrial wood harvest goes to make paper. Nine percent of total manufacturing carbon dioxide emissions come from pulp and paper manufacturing, with the majority stemming from the energy production needed to power pulp and paper mills.
“We don’t think about paper, we don’t think about printing — it’s about 6 percent of our GDP,” said Don Carli, a senior research fellow at the Institute for Sustainable Communications.
On average, Americans use 700 pounds of paper each year, the most, per capita, in the world. “Try doing a day of business without it,” Carli said. “Yet we’ve kind of written it off and assumed it’s not all that important.”
In the U.S., paper mills have been shutting down at an alarming rate. Since 2000, 97 paper mills have closed — as of 2006, there are now just 450 operating mills in the U.S. including some owned by the likes of Weyerhaeuser and Inland Paper, according to Bill Quigg. “These are high-paying jobs in rural communities going offshore,” he said.
While about half of the paper used in America is recovered, the country’s single biggest export by volume is paper, according to Carli. Trucks fanning out from West Coast shipyards delivering goods from China return full of paper that’s shipped to mills to be downcycled into cardboard that’s used to ship more goods to the U.S. This puts a premature end to fibers that could go back into higher-grade papers, requiring more trees to run the industry. “We might be out of business because China will pay more for our raw materials than we can pay,” said Bill Quigg.
Using recycled copy paper from 100 percent recycled content, such as Harbor 100, instead of copy paper from 100 percent virgin forest fiber reduces total energy consumption 44 percent, net greenhouse gas emissions 38 percent, and particulate emissions 41 percent. It also cuts both wastewater and solid waste in half and eliminates wood use entirely, according to the EPN report.
Although paper mills have shut in North America, they’ve opened in places like Asia and South America, where labor is cheaper and forestry practices less regulated. The new mills have the advantage of newer technology, meaning they can produce more paper faster. These mills primarily produce paper using virgin wood, but even if they shifted to post-consumer content, shipping the paper back to the U.S. would offset resource savings. Bill Quigg won’t even ship across the country because it erodes his price competitiveness — costs bigger companies can price in. “Why waste the oil by packing these products all over the country?” Bill Quigg said. “If I ship elsewhere, I pay freight.”
Grays Harbor Paper has been able to stay open in a declining business in part because it created a nimble organization. “We outperform by manpower any comparable mill by order of magnitude,” Bill Quigg said. Employees vote on work schedules and have final say on things such as whether the paper meets quality standards.
In many respects, however, they realize the deck is stacked against them and bank on customers recognizing the external costs of purchasing conventional paper. Greater domestic risks exist as well as more mills move abroad. “My concern is that as a country we could become as dependent on imported paper as we are on imported oil,” Carli said.
Arrows in the Back
With only an estimated 3 percent of Grays Harbor Paper’s production being 100 percent post-consumer paper — and 14 percent for other recycled paper — the company is a long way from its leaders’ vision. Some customers are skeptical about its quality because of previous experiments with recycled paper. And despite an increasing number of companies espousing green principles, many have been slow to buy, citing price. “Starbucks and others, even though I’ll pay $3.85 for a latte, they won’t pay $3 for a ream of paper that will help them reduce their carbon footprint. It’s very, very frustrating,” David Quigg said.
Bill and David Quigg maintain an upbeat attitude. “We have a lot of pioneers who are willing to take arrows in the back to try this stuff,” Bill Quigg said. “If this was being done in other parts of the country, I don’t think it’d be nearly as well received.”
Yet they also acknowledge the realities of the beast. In order for the company to be successful — and the community to persevere — they need to stay in business.
Said David Quigg, “Right now if somebody came by and said, ‘Hey, we want to put 200 jobs in but we make acid,’ we’d say, ‘Ah, that might be pretty good,’ because it’s 200 jobs,” David Quigg said. “Where, in a few years from now, we can say, ‘That doesn’t fit into our waste stream symbiosis, so, unfortunately, we’d prefer if you look at other locations. But, if you’re making a product that’s a waste of this or input of that, then we can talk about it.'”
