The pattern and level of paper recycling has been determined which would maximally reduce total U.S. energy use while maintaining existing patterns and levels of final consumption and paper production. Dollar and energy costs of increased units of paper recycling were calculated and compared to estimated marginal energy costs. We found that substantial increases of paper recycling were justified on the basis of increased costs of energy since 1974. Actual recycle rates did increase sharply after 1974 energy price rises roughly to levels we predicted but actual cause and effect are not established. We speculate the further increases in recycling are justified on the basis of historically volatile scrap prices and cyclic paper demand, and the wide difference in marginal energy costs between industry and final consumer.