Landfill gas and industrial ecology
The newspaper article “Landfill saves jobs at Cascades” from La Presse (December 9, 2005) is of interest to waste management professionals and policymakers. (I have reproduced it in full below.)
The article shows that a fine-paper plant in Saint-Jérôme, Quebec would have been completely shuttered, but for the fact that inexpensive landfill gas from a special project has kept the plant (or at least most of it) competitive in today’s tough paper market.
In addition to illustrating an environmental win (utilization of potent methane gas that would otherwise have just been flared or released to the environment), the story points up another concept that I wish were banted about more often at waste industry conferences and professional gatherings: industrial ecology.
Although the term “industrial ecology” has many components, at its core it’s about one industry’s waste becoming the feedstock for another industry’s operations. Often it refers to the use of waste energy. A good example is steam from a boiler or incinerator used to drive turbines to produce electricity, or to otherwise power a nearby plant.
In today’s climate of rising energy prices, landfill gas and other energy outputs from waste management is becoming a cricual factor. In fact, I participated in a recent FCM workshop put on by MWIN in which the people at my table conducted an exercise with surprising results. We were tasked with designing a waste management system to achieve a certain level of diversion for a municipality of a certain size. In the end, we concluded that rather than collect source-separated organics for composting, it made more sense in this example (since we had no shortage of landfill space) to develop the landfill as a “bioreactor” and make use of the methane for commercial purposes.
The Cascades story is more or less a real-world example of such a strategy in action. I expect to see more stories like this in future as municipalities and different industries work together to boost efficiency of what is often a wasteful and inefficient system, in terms of power use and generation and garbage disposal.
From La Presse, December 9, 2005, Montreal, Quebec
Landfill saves jobs at Cascades
After losing a lot of money, Cascades has finally decided the fate of its fine-paper plant in Saint-Jérôme. One of its four machines will be put out of production and 100 jobs will disappear, but the plant itself will survive.
The 315 employees that are staying can be thankful for the landfill gas now used to power the venerable plant built in 1892. “It’s the reason why we can still see a future for the plant,” explained Mario Plourde, President and CEO of Cascades’ Fine Papers Group.
The landfill gas produced at the Saint-Sophie landfill site supplies nearly three-quarters of the Saint-Jérôme plant’s energy needs at a very low cost. According to Mario Plourde, the plant could not have survived if it had to pay the current market prices for natural gas.
In order to power its plant with the methane produced by the decomposing garbage — a first in Québec — Cascades signed an agreement last year with Gaz Métro and Intersan, the owner of the Sainte-Sophie landfill site. This 10-year agreement included extending the Gaz Métro pipeline from the landfill site to the plant, a distance of 13 kilometres.
The project entailed investments reaching $10 million and Cascades began to receive the landfill gas at the end of 2004.
Half of the 100 jobs that will be eliminated after Christmas are production jobs, and the other half will be in management, maintenance and technical services. The machine to be mothballed was capable of producing 8,000 tonnes annually.
Its production will be transferred to the three remaining machines, and the plant’s production will stay the same, around 140,000 tonnes annually.
Mario Plourde clarified that the plant will also drop some types of paper production and specialize in the more profitable products. These include papers with 100% recycled post-consumer content, security papers (for passports and so forth), and opaque paper. The Saint-Jérôme plant was owned by Papiers Rolland before it was purchased by Cascades in 1992.
Cascades closed its other fine-paper plant in Thunder Bay, Ontario, and sold its paper merchants division to the Australian group, PaperlinX. Its fine-paper production will be concentrated at Saint-Jérôme.
While the lay-offs will cost Cascades $9 million, mostly for severance payments, this decision will enable the company to save $15 million annually. Fine Papers Group anticipates becoming profitable again in 2006.
Mario Plourde admits that the company, founded by the Lemaire brothers, is a small player in the fine-paper market, but it is feeling the competition less than Domtar because of its very specialized production. “We may be small, but we aren’t typical,” he said.
The soft markets and the rising value of the Canadian dollar has nonetheless pushed Cascades bottom line downward. After the first nine months of its current financial exercise, it has shown profits of $7 million (9 cents on the share), compared with $18 million (22 cents on the share) for the same period last year.
Yesterday, Cascades finished the day on the TSE at $9.40, unchanged from the previous day. Over the last year, share prices have fluctuated between $7.35 and $13.95.
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