US pulp-maker pioneers new biofuel

From the outside, the rustic red-brick mill on a bend in Maine's Penobscot River resembles any other struggling American pulp and paper mill.

But along with its usual business of pulp-making, the century-old mill is doing something unprecedented: Developing technology to produce bio-butanol, a jet fuel, from parts of trees that would otherwise go to waste, one of the world's first to do so.

Production is still two years away, but the reinvention of Maine's Old Town Fuel &

Fiber mill is already drawing interest as a potential model for a new wave of biofuel companies that could slash dependence on oil, create jobs and reduce the emissions that lead to global warming.

Loggers, a fading way of life in rugged northern US and Canada, see the mill as a lifeline for their crippled industry. Environmentalists see it as a test of the Obama Administration's push for a big expansion in biofuels.

And chemical and oil companies are waiting to see if the mill can do what none has done before by extracting sugars from wood chips into a biofuel that many regard as more efficient than corn-based ethanol as a possible substitute for gasoline.

Like its once-mighty peers, Old Maine's mill has suffered in recent years from declining pulp prices and loss of market share to Chinese and Latin American rivals. States must use 21 billion gallons of "advanced" biofuels such as cellulosic ethanols, bio-butanol and "green gasoline" a year by 2022.

Whether the technology takes off comes down to cost - and to corn. For much of the last decade, federal officials have touted the potential of corn ethanol as the best substitute for gasoline, but critics question that assumption, noting it corrodes pipelines and raises food prices.

Bio-butanol, a relative of ethanol, is less corrosive and easier to mix with gasoline. Unlike ethanol, it can be transported by pipeline. And its energy content is about 30 per cent higher than ethanol's. If regulations allow, it could be pumped into a fuel tank with no changes to a car engine.

Butanol is also sometimes used as a petrochemical in brake fluids, paint thinners and plastics.

Other companies are trying, such as startups Tetravitae Bioscience in Chicago and Cobalt Biofuels in Mountain View, California.

But Old Town is the first to do so with a fully functioning timber mill that already generates cash flow by selling traditional pulp to paper companies. Bio-butanol will be derived from wood that would have gone to waste in pulp production, or have been left on the forest floor as unusable by loggers.

Already the plant has put in place a system for extracting sugars from the wood and expect by year end to start construction of a biorefinery to turn it into butanol. A big factor is the Obama Administration's push for renewable energy through tax breaks, loan guarantees and millions of dollars in grants, with more support expected in upcoming energy bills.

The mill is on track. Two towering vessels, each 30 metres high, extract sugar from wood chips that will eventually make butanol, while also maintaining the traditional process of extracting fibre from wood to create sheets of dried pulp to sell.

Initial volumes will be small, about 1.5 million gallons of bio-butanol a year produced from 80 dry tons of wood. "But we believe this technology can be replicated," said Old Town's president, Dick Arnold.