Reflections from my Trail No 29

Clearwater Paper, formerly Potlatch Mill

A Nutty Tale

Driving from Orofino to Lewiston is always a delight as we are able to cruise Highway 12 and observe one of America’s most gorgeous rivers. Upon passing the Casino we are welcomed to Lewiston with a view of industrial magnificence, the Pulp and Paperboard mill operated by Clearwater Paper (formerly Potlatch!) The most striking and mysterious landmark on the Mill’s site is the large building with what was once called the tallest structure in Idaho!

No. 5 Recovery Boiler and Evaporators, a landmark representing the major Idaho Forest Products Industry and the thousands of forest landowners, foresters, loggers and mill employees that work year around to support our economy!

While many who regularly see this land mark are happy to know they are almost into Lewiston, a few see it as a reminder of the old days when the emergence of this building and the sophisticated equipment it contains marked a future of promise for the mill which was in an advanced state of obsolescence. The author was privileged to be part of the great team that designed the modern process and supervised its construction, start-up and operation.

Way back in 1975, as a young Potlatch engineering type employee I was assigned to form a three man team to evaluate the condition and efficiency of the Lewiston Mill as compared to state-of–the-art modern technology. It was a revealing study that highlighted the actual competitiveness of the mill with respect to the actual costs that modern-technology-using-competitors incurred.

While still marginally profitable, it was obvious that any slight increase in energy, wood, or chemical costs would allow competitors in the United States, or worldwide, to force the mill to close. At that time mill closure would have eliminated 2000 mill jobs in Lewiston and thousands more in supporting supplier businesses and the in-forest loggers that are the backbone of local economy.

As always, time slipped by and the company’s upper management decided to proceed with other things. Between 1975 and 1979 the company decided to fund a major project near its huge forest land base in Southeast Arkansas and invested about $150 million to build the Arkansas Pulp and Paperboard Mill. When completed the modern technology in use there highlighted the cost problems at the “old” Lewiston Mill. In 1979 I was assigned to the Lewiston Operations and we began to study the pathway to modernize to remain cost competitive.

We hired a reputable pulp and paper engineering firm and they studied options and we diligently worked to evaluate their recommendations with a very small company team, again I was part of that design effort. The result was a beautiful engineering analysis and cost estimate in a several hundred page, super professional hardbound report.

We accepted these recommendations from the engineering firm, which upper management respected, and took those to the Board of Directors for approval. Expert’s best “low cost” project estimate to complete the modernization of the process was a shocking $186 million, of which $86 million would be required to build the first and most critically needed item, the No. 5 Recovery Boiler and Evaporators which we all see each time we drive by the mill.

Well, we made a presentation of desperation to support our prediction of total mill closure if these projects were not authorized. The Board responded with a super vote of confidence and approved the project package, the largest ever for the company at that time. We returned triumphant from our trip to San Francisco.

A few days later our local team pondered how to proceed with these massive expenditures when the dawn of an idea crept into our collective concerns. We realized that this project would overwhelm a company like Potlatch for years and stifle opportunities at other operations. The question was, do consulting engineers actually seek “lowest cost” alternatives and could we discover lower cost pathways if we designed it ourselves?

We asked the board to delay the start of the project while we put a company team to work on the project free from operating responsibilities. In two years of hard work we focused on the $86 million No. 5 Recovery Boiler project, specified everything down to pipe size and all of the hundreds and thousands of details and rebid it directly to all vendors.

The result, we went back to the Board and requested they cancel the $86 million project and replace it with a $70 million dollar option which would be the same, but even better No. 5 Recovery Boiler. They approved our request.

A key component of our project was our selection of a Scandinavian boilermaker that boasted it would bid on a ‘turn-key” basis. Turn-key to them meant, as they explained in their contract, that they would build and present you with the keys to a boiler, ready to fire for a specified dollar amount. Their bid, to our detailed specifications was way under the other suppliers.

We contacted every user of these boilers worldwide and learned that when done the boilers were wonderfully efficient. We also detected a common complaint about the “Turn-Key” price. Every user had found major changes necessary in the “Turn-Key” package resulting in a near doubling of actual cost by start-up. We accepted the bid and construction began and proceeded.

The boiler manufacturer hired a Seattle boiler construction company to do the work. Our very detailed specification, part of our contract was valuable because each time the Scandinavian company demanded we pay large amounts due to what they said were necessary “change orders” we pointed to our contract. We changed almost nothing!

A week before the scheduled start-up of the boiler the Seattle contractor, who was a subcontractor to the Scandinavians and had no business contract with Potlatch, demanded we pay them $7 million before they would affix a legally required pressure certificate to allow the boiler to operate. This certificate is only issued by a certified contractor who has built or repaired high pressure equipment. Without it we would never be able to use the boiler. We explained that their quarrel was with the Scandinavian company.

Four days in Seattle over the Fourth of July with arguing lawyers and company executives and we finally explained that we hadn’t requested any significant changes and had issued the Scandinavians progress payments so that all we had left to pay was $1.7 million. All the legal beagles agreed and the Scandinavians agreed to negotiate with the Seattle contractor to settle their monetary issues.

The deal was that I was to meet the representative of the Seattle contractor on the 15th floor of the boiler and after he’d attached the metal nameplate certificate to the boiler with four nuts we would hand him a check for $1.7 million. We were both nervous, me because I’d never been entrusted with such a large check, and he because he had to attach the certificate and receive the check.

I met him in the basement and we had the boiler ready to light off. Up the elevator to the boiler drum where he placed the metal tag and nervously dropped all four nuts! The boiler had many grating floors and we could hear the nuts rattle as they found their final resting place.

So, down the elevator we went to our storeroom where we got a lot of nuts. Then up again to where he attached the plate, I gave him his check and radioed the control room and within 10 seconds we had a fire in the boiler.

I never drive past this boiler without reliving that day, 32 years ago, when we dropped four nuts for money and started the first part of the continuing story of the mill in our region’s economy!

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