A method for manufacturing a tire retardant cellulose insulation with reduced density and reduced settling. The method consists of adding a material, the fibers of which have a positive electrostatic charge, onto a shredded newspaper base either before or after the addition of a pre-coat, consisting of a mixture of limestone and an antistat. A fire retardant agent is then added and the materials are ground in a finish mill. The newspaper fibers become positioned at an angle to the paper pieces, increasing the distance between the paper pieces, thereby lowering the density of the cellulose. Fibers such as ground cardboard, wood mulch, sawdust, and fiberglass fibers are examples of materials with electrostatically positively charged fibers.