$140 million Millinocket pellet mill project seeking air emissions permit from state

Site of the proposed Thermogen specialized wood pellet plant in Millinocket.
Courtesy of Jon Campbell
Site of the proposed Thermogen specialized wood pellet plant in Millinocket.
Posted June 13, 2014, at 4:13 p.m.
Last modified June 13, 2014, at 6 p.m.

MILLINOCKET, Maine — A state environmental agency is reviewing an air emissions permit application for a proposed $140 million specialized wood pellet mill, officials said Friday.

Thermogen Industries submitted its amended application for a permit to the Maine Department of Environmental Protection on Friday. If the permit is approved, construction on the facility could start at the Katahdin Avenue industrial park as early as September or October, company spokeswoman Alexandra Ritchie said. The project is expected to take about a year to complete.

The application review is expected to take three to six months, said Marc Cone, director of the Bureau of Air Quality at Maine DEP.

The plant is projected to create 55 jobs directly, 281 indirectly and produce 300,000 tons of high-energy biofuel pellets annually for distribution to European and United Kingdom electricity plants as a coal substitute. It would use a thermal-steam process commonly employed in several industries, including wood pulp manufacturing.

“We are slightly hesitant to commit to a time frame given the elements still outstanding,” Ritchie said. “But an optimistic timeline would have us breaking ground in the early fall.”

Thermogen is a company created by Cate Street Capital, the New Hampshire-based investment firm that bought the Millinocket and East Millinocket paper mills for $1 in 2011, to oversee the pellet mill project on its Katahdin Avenue site.

If the latest air emissions permit is approved, the plant would be operational in late 2015, according to the application. Thermogen originally planned to start construction in October 2013, but the project has been delayed by financing issues.Thermogen officials have not decided yet whether to accept the $16 million loan that the Finance Authority of Maine voted 8-5 to grant the company in April, Ritchie said.

Thermogen reapplied for an air emissions permit after announcing in February that it had changed the project’s technology from a microwave pellet-roasting process to a Masonite-based process. The steam-exploded pellet manufacturing process promises greater production with a more proven technology, officials have said.

While the Masonite process is common, particularly with pulp mills, Cone said this application is the first Maine has seen where it is employed in pellet manufacture. The facility would be among only two DEP is aware of operating in the U.S., he said.

The facility’s annual potential carbon dioxide emissions exceeds what the Maine DEP defines as a major source threshold, but these emissions predominantly come from the combustion of wood in the dryer’s burner system, the application states.

“There should not be the pulp and paper odor but you would get emissions similar to drying wood because the constituents in the wood that are volatile are similar and some of them would be released in this process,” Cone said.

According to the application, the facility redesign would account for less pollutants than created by the original microwave-technology, which the DEP approved. The new process includes a regenerative thermal oxidizer that would further remove pollutants from the steam-exploded process before being exhausted to the atmosphere.

A University of Maine professor who reviewed the project for FAME, Richard Rice, called the new technology employed a significant improvement over the previous plan.

Cate Street has been working for several months to finish the financing for Thermogen and to pay outstanding debts and taxes accrued by Great Northern Paper Co. LLC, the corporation Cate Street created to oversee the paper mills.

Ritchie said that GNP is working diligently to solve its financial problems. It hopes to solve its tax woes with Millinocket “soon” and for “a pre-fall restart” of the East Millinocket paper mill, she said.

The East Millinocket paper mill restart “is something that is taking a lot longer than we hoped but it is still a primary initiative here,” Ritchie said.

The East Millinocket paper mill stopped production in January and laid off 212 of 256 workers on Feb. 6. GNP owes East Millinocket and Millinocket about $3 million in delinquent property taxes. Millinocket town leaders have met with Cate Street to discuss a property tax settlement and with Gov. Paul LePage to discuss an economic development matter within the last two weeks. Millinocket officials said Thursday they hope for a possible settlement next week.

Millinocket officials announced May 27 that they had filed a lien six days earlier seeking $2.24 million from Great Northern. Great Northern Paper owes Millinocket about $2.3 million and East Millinocket about $657,900 in delinquent property taxes for the 2013-14 fiscal year, which lapses June 30.

The largest single taxpayer in East Millinocket and Millinocket, Great Northern Paper owes at least $6.8 million in unpaid taxes and other debts, according to a liens listing at the Penobscot County Registry of Deeds.

As of Friday, Millinocket’s lien remained in place.

 

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