When my husband was deployed last year to Afghanistan,
they would shred the paper, but then used the shredded paper to turn into fuel donuts for the locals.
In soldiers spare time, the volunteered to make these. They put the shredded paper in barrels. Added water. Mashed it to pulp. Put the pulp into a tube. Pressed the water out. And put the fuel donut (about the size of a roll of tp) out to dry for days. Locals used them for heat & cooking. Soldiers gave them out while talking to locals & seeking info. Gave out care packages for children too.
Here is the process.
http://www.youtube.com/watch?v=VsT2XqQaG8w
Perhaps its what it reminded me of & why I was interested.
If pulping sensitive documents is good enough for the military in a war zone, it's probably good enough for our house.
Some uses for the mashed up paper.
http://papermasher.wordpress.com/2012/06/10/ive-papermashed-whats-next/