A letter from a friend

Tissue makers are facing an extreme challenge in energy costs. While the effects are now tough to take, the cost shock may help us get on better footing for the future.

Guy Goldstein

Dear Ms. Energy,

I am writing to you because you are getting out of reach! I can't sleep any longer because I am having nightmares about...Arabian Nights!

In fact, petrol prices auto-regulate themselves: if they are too high they slow down the economic growth and dampen demand and prices. Today's prices, corrected for inflation, still have not reached the peaks of 1979/82 but they are getting close (Fig.1). Prices are, in fact, more dependent on the political situation than anything else. Saudi Arabia is still the number one producer in the world but OPEC production has stabilized during the last few years. Emerging countries are having a small impact on consumption. China for example, has had a growth in petrol consumption of only 2 barrels per capita versus 25 in the US since 1975. As living standards improve in China, demand will increase.

TAPPI publishes every month the price of OPEC petrol calculated according to an assortment (blend) representative of what our industry uses (Fig.2). The actual price, at the time of writing, is close to $70 per barrel and the yearly average price of $23 in 2001 went up to $51 in 2005 and is still significantly going up.

Natural gas prices are directly linked to oil, and the rather “new” technology which liquifies gas for transportation should make it much more efficient to move long distances. The technology has also improved the cost of liquidising gas. Natural gas will cover 25% of our energy needs in 2020. When we look specifically at natural gas prices in the US since the mid-1990’s, they have been multiplied by 500, leaving North America with the highest prices in the world.


1) Be much more efficient.

2) Look at alternative energies and synergies.

BE MORE EFFICIENT. Since 1975, the energy extracted from each barrel of oil, thanks to new technologies, has more than doubled, meaning an average cost savings of $12 per barrel. The US already uses 47% less energy per unit of production than it did 30 years ago. Lots of progress has been made. Replacing the remainder by natural gas and biofuels would cost $18 per barrel on average and the gap is diminishing.

The energy efficiency has other benefits as it accelerates the economic development by saving companies money and making it easier to invest. Revolutionary new technologies such as hybrid engines and biofuels can treble energy savings for cars, while composite materials can halve the weight of vehicles while offering even more protection, saving gas and human lives.

Biofuels will need some 90 billion dollars for development but will help revitalise the smaller villages thanks to 750,000 new rural jobs being created. This will double or triple the income and the output of agricultural land and will also preserve water resources.

Brazil already produces 25% of its petroleum needs with ethanol made from sugar cane. Europe uses 5 to 10% of ethanol in gasoline for cars. In 2003, biodiesel in Europe was 17 times the production in the US.

Efforts need to be made even in the land of plenty. When the US looked carefully at the use of gas, between 1977 and 1985, the economy grew by 27%. So where there is a will (and a need), there is a way.

In our industry there have been lots of developments as we have heard at length during the Round Table Discussion at Tissue World in Miami earlier this year. Sophisticated new headboxes, advanced refining options using biochemicals, new, more efficient, high-temperature, high-velocity hoods, new presses that can save hundreds of thousand dollars a year, etc, etc.

Heat recovery has now become almost standard with lots of measures to reduce excess compressed air usage, a great waste of energy.

Machine efficiency has been greatly improved by a new generation of wires and felts enabling in general to cut the use of vacuum for dewatering. Water consumption is now monitored carefully and optimised. The use of certain chemicals in the process can result in energy savings. Fighting rejects and lowering waste go in the right direction too.

Cogeneration is becoming more common as turbine efficiencies increase. We were given the example of new applications from cogeneration, using twin gas turbines in a country where energy costs are extremely high, producing electricity, the hot air being injected directly into the hoods and so is the steam for the Yankee, resulting in an energy savings between 40 and 50%.

A complete revisit of the process can result in saving water, recycling more fiber and in general better performance at less cost.

Today Tissue Machines are, by far, much more energy efficient than they were only 10 years ago, with a much lower installed power.

More and more old, inefficient machines will be taken out of service because of the high, uncontrollable manufacturing costs.

ALTERNATIVE ENERGIES. While at University, many many moons ago, I had a Professor in Physics who was always reminding us that: “Solar Energy was not created overnight”. He was absolutely right. A lot of progress has been made in efficiency of solar panels. Solar energy is indeed already used in many countries to heat houses, produce hot water, make electricity and air condition buildings.

We need to work and think harder to save and conserve energy. Pulp manufacturing is a net energy provider, as we already know, due to the burning of wood liquor and subsequent steam and electricity generation.

We already talked about biofuels, composites and hybrid technology but there is also nuclear energy, hydro-electricity, wind farms that will also result in less CO2 emissions, helping the world reduce global warming.

Geothermal energy is already used in certain countries like Iceland, and we will see more and more applications pumping heat from the ground. We are also looking back at other fossil fuels like coal and tar which, with modern technology, can be burnt more cleanly and efficiently than ever before. Sulfur in coal, which led to the closure of a great number of mines in earlier days, is not really an issue anymore.

Due to the higher price of energy, some older installations which were deemed too costly to run are being put back into use because they are becoming competitive again. We have to review our options with great care and evaluate the various possibilities now in front of us.

Ms. Energy, you are indeed forcing us to re-invent the industry in many areas. Thanks to the upside move in energy prices, we are getting more inventive and smart. Give us time to adapt and we will be alright. The crisis today was to be expected. We underestimated the political importance that some of our leaders have on the economy and the influence they can use.

Ms. Energy, once again we appreciate your efforts to make us lean and clean and I think you will be proud of us once we have sorted out the future.

Your beloved,

Guy •

Dr. Guy Goldstein is an independent consultant, but we have agreed that he will answer, to the best of his knowledge, any reasonable questions related to our industry.

You can contact him through the Perini Journal at: e-mail: perinijournal@fp.kpl.net.

Answers will be given either via the PJL or directly.

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