The U.S. Pulp and Paper Industry

A Key Player in the Coming Bio-Revolution

Throughout the twentieth century the U.S. pulp and paper industry supplied domestic markets while also serving global markets as a net exporter. It was, and remains, the world’s largest pulp and paper industry. 

In recent decades, however, fortunes have begun to change. Despite the fact that paper and paperboard  consumption has more than doubled in the United States since 1970 and increased almost 40 percent since the late 1980s, there have been no new domestic paper mills constructed since 1989, and no new paper machines brought on line since the mid 1990s. Overall, domestic paper and paperboard manufacturing capacity declined from 2000 through 2003 at an average annual rate of 0.6 percent, the first period of consecutive year declines in manufacturing capacity in U.S. papermaking history. While it appears that renewed modest investment in the U.S. paper and paperboard industry may occur over the next several years (growth of 0.7 percent in manufacturing capacity was recorded in 2004), further losses in paper mill employment and production capacity are likely.

Declining domestic production has been more than offset by a growing global production capacity. Since 1970, worldwide paper consumption has increased over 150 percent, while pulp and paper manufacturing capacity  has increased by an even greater percentage.

In response to the challenge posed by global competition, the domestic paper industry has identified a new strategic direction and embarked on an aggressive research initiative in cooperation with the U.S. Department of Energy and a number of universities. The strategy is to convert existing pulp and paper mills to full bio-refineries, capable of producing not only pulp and paper, but bio-fuels, bio-chemicals, and bio-feedstocks as well.