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Week of 10 May 2021: What is your energy strategy now? Part 2

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Here in the United States, with a change in administrations, there is often a change in energy policy. It seems no different this time. If you will recall, many times I have said all energy policy is political. This has not changed. My confidential touchstone on energy activity tells me energy research requests are up, too.

For stationary energy, it seems like one couldn't go wrong, planning for natural gas and hog fuel as their primary sources these days (but read further). Of course, if you have a recovery boiler, it is in the mix, too--no one has figured out how to manufacture virgin pulp without a recovery boiler.

The question comes down to coal. My thinking is keeping the coal boilers running if your short-term maintenance and regulatory charges are anticipated to be less than 30 - 40% of replacement costs. By "short term" I mean five years. If your costs are higher than this, start looking for an alternative. Nevertheless, you must have a plan to devolve yourself of coal in the future should the political winds continue to blow that way.

These days, there are several alternatives to directly owning your energy assets, should you need to replace them. There are major companies that will build energy islands, finance and operate them for you. I like this alternative if you can get the numbers to work and find a reliable owner/operator. This allows you to focus on making paper instead of energy production and reliability.

The new piece to such contracts, however, is contractually binding your energy provider to GHG (Green House Gases) goals. Energy has moved beyond costs and routine return on investment to monitoring your GHG's and their trend. As I stated last week, your very sales strategy in the future may depend on your GHG score. This has been the case in art papers already for a decade or more. With discerning artists as customers, they have been asking these questions for a long time.

And, of course, your strategy should be always to use less energy or to capture heat and use it over again. This has been going on for a long time already, but there are still opportunities out there for heat capture. Dryer hoods are a fertile field. There is lots of heat, but it is only a few degrees above ambient. The paper industry is crying for a technology that will take a low heat head (the difference between temperatures) at a high volume and capture the heat for reuse.

On the other side, cold, I have a story to tell, although it does not relate to the pulp and paper industry. On Wednesday, 21 April 21, about noon, I sat on the front porch of a Mennonite farmer in southern Ohio and watched him make homemade ice cream. For ice he used pond ice, harvested in January and kept in his cooler. All these Mennonite farmers in southern Ohio have large coolers that hold ice they harvest from the ponds in January, sometimes as thin as 4 inches. There coolers are insulated enough, and they store enough that they make it last for twelve months--until the next January. They have no electricity on their properties.

We would be better off if we looked at some of the energy ideas from people like this.

Be safe and we will talk next week.


Other interesting stories:

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