It's definitely time to make some plarn.
I did a little research to find some plarn-making techniques. For future reference, and for any of you who are looking for the same, I've posted the links that I've found to be the most helpful:
Instructions from My Recycled Bags
How to make Plarn and Crochet an Eco-Friendly Tote Bag from Etsy.com
(I think these instructions are my favorite )
Here's a video that's pretty good too: