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dependence on self-generated fuels has increased from an initial 40.3% of total energy consumed to an historic high of 55.9%, with the contribution of spent pulping liquors rising from 33.3% to 40.8%, bark from 4.5% to 6.6% and wood residues from 2.0% to 7.3%.

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Perhaps the next most noteworthy aspect of the industry's changing mix of energy sources is its significantly reduced dependence on purchased fuel oils - from 22.2% of total energy consumed in 1972 to 6.3% in 1994.

While the contribution from natural gas purchases also declined during this period - from 21.1% of total energy consumed in 1972 to 16.9% in 1994 - the industry's relative reliance on coal increased from 10.7% to 12.5%. The nature of the industry's voluntary and mandated responses to environmental issues during the 22 year period were largely responsible for the increased use of purchased electricity - from 4.4% of total energy consumed in 1972 to 6.4% in 1994.

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CHART 1

U.S. PULP, PAPER AND PAPERBOARD INDUSTRY
Changing Fuel Mix 1972-1994

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75 76 77 78 79 80 81 82 83 84 85 86 87 88 890 131 92 93 94

The year-to-year changes in the industry's sources of energy, demonstrated in Chart 1, reveal that

the upward trend of increasing dependence on spent pulping liquors has been relatively uniform and sustained, reflecting, in part, the industry's progressive addition of kraft-based pulping capacity during the period as well as the rate at which that capacity operated in a given year. The apparent acceleration in 1994 is largely explained by the combination of a comparatively high rate of annual capacity utilization and the effect of expanded use of oxygen delignification by several kraft pulp mills, adding to the availability of spent pulping solids to recovery furnaces in those mills.

the industry's degree of reliance on fuel oils remained relatively constant between 1972 and 1978 when the Iranian Crisis precipitate rapidly escalating global crude oil prices from the 1972 pre-Arab Oil Embargo level of less than US$ 10.00 per barrel towards S$40.00 per barrel.

Because many of the industry's existing boilers have had dual oil/natural gas capability, (due in part to the traditional seasonal swings in the availability of the two fuels as natural gas is preferentially directed to households during winter months), it was economically attractive for those facilities to switch to a heavier dependence on natural gas following 1978. However, the subsequent increase in domestic natural gas prices with well-head deregulation effectively dampened the industry's enthusiasm for this fuel and its dependence on both now-relatively expensive fuel oil and natural gas declined in parallel between 1981 and 1986. The subsequent emergence of a domestic natural gas supply "bubble" reversed the earlier price surge which followed deregulation and the industry has since turned increasingly to natural gas as the environmentally-preferred fuel, making it the largest element of the industry's mix of purchased energy sources in 1994.

The industry's use of coal declined quite sharply during the early 1970's when fuel oil and natural gas prices were beginning to rise, explained largely by the advent of more demanding air pollution regulations with implementation of the generic Clean Air Act of 1970. Installation of appropriate pollution abatement devices enabled the industry subsequently to increase its use of coal progressively through the 1980's, with the trend flattening into the 1990's. The industry's overall use of coal should be qualified by recognizing that coal is now the single largest source of any form of energy to those segments of the industry located in the North Central and Mid-Atlantic regions of the USA. (See "Regional Aspects" in subsequent discussion.)

The use of bark and wood residues as fuel grew progressively through the 1970's and early 1980's, slowing since but still currently representing the industry's third most significant source of energy, despite the constraint to date of this fuel option being

largely limited to facilities which process wood into pulp and/or have solid fuel boiler capability. (Emerging technologies to gasify wood and fiber residues as well as of spent pulping liquors will be addressed in subsequent discussion.)

Despite the industry's expanded role in cogeneration during the latter part of the period under review with the enactment of the Public Utilities Regulatory Policies Act of 1978 (PURPA) - a role which has been limited to some degree to the industry's larger, integrated facilities - there has been an increase in the industry's overall reliance on purchased electricity, driven in part by the nature of the industry's responses to increasingly demanding domestic regulation of emissions and effluents which called for electrically-driven apparatus such as flue gas scrubbers and effluent aerators but also to the industry's rapidly expanding use of recovered paper.

INDUSTRY-WIDE GAINS IN ENERGY EFFICIENCY:

While demonstrating the dynamics of changing energy sources for the pulp and paper industry, AF&PA's EMS also provided an indication of the industry's overall improvement in energy efficiency during the 1972 - 1994 period. Measured in terms of its average consumption of fossil fuel and purchase energy per ton of dried pulp and paper/paperboard produced, the ratio declined from 19.1 million Btu's in 1972 to 11.3 million Btu's in 1994 - a gain in purchased fuel efficiency of almost 45% after adjustments for process changes made by the industry between the base year and 1994.

However, when all sources of energy are taken into account - including the relatively inefficient "wet" self-generated sources such as spent pulping liquors, bark and wood residues - the industry's average energy consumption per ton of dried output has nevertheless fallen by more than 21% from 33.0 million Btu's in 1972 to 26.0 million Btu's in 1994.

(A reviewer of an earlier draft of this paper points out that essentially all of the reduction in purchased energy use per ton occurred between 1972 and 1986, accompanied by a significant increase in the industry's use of self-generated and residue fuels. This phenomenon demonstrates, in his view, the industry's ability "to react nimbly under adverse variable cost conditions, despite the capitalintensive nature of primary mills".)

REGIONAL ASPECTS OF THE INDUSTRY'S ENERGY SOURCES:

It is important to qualify the broad trends in the industry's overall reliance on different energy sources, discussed above, by recognizing the sharp and meaningful contrasts that exist between regional segments of that industry.

Table 2 illustrates the principal contrasts, weighted against the regional concentration of the industry's dried pulp and paper/paperboard production.

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TABLE 2

REGIONAL CONTRASTS IN ENERGY SOURCES - 1994

(Percent of Total Regional Energy Consumption)

SOUTH
CENTRAL

MTNS &
PACIFIC

MID

NORTH CENTRAL

NEW
ENGLAND ATLANTIC

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