PORTLAND, Maine — The plan to rebuild a wood-fueled economy centered in East Millinocket has major financial and technological hurdles to clear before it has any chance of helping revitalize communities devastated by the paper industry’s decline.
Industry experts interviewed last week about EMEP LLC’s East Millinocket plan expressed a mix of excitement about the technology and skepticism about the economics of the plan that has, at its heart, a unique and commercially untested process.
“The economics are tough because the capital investment — at least for these first-of-a-kind plants — is very high,” Clay Wheeler, a professor with the University of Maine’s chemical and biological engineering department who researches biofuels, said.
Wheeler said the economics for all efforts to turn wood into liquid fuel are difficult for one clear reason.
“We’re taking one of the finest materials that nature has engineered — that has uses as building materials and paper and other things using nanocellulose fibers — and we’re converting it to something that we actually don’t value very much, which is transportation fuels,” Wheeler said.
Michael Bilodeau, a faculty member with UMaine’s Forest Bioproducts Research Institute, said ethanol production from older wood pulp mills dates back as far as 1905, with interest ebbing and flowing based on the availability of fossil fuels.
“It tends to happen when there’s a shortage of fuel, whether economic or political, that it’s justified to use wood for fuel production,” Bilodeau said. Oil prices have crept up but remain relatively low.
Eric Kingsley, a forest products expert and consultant with Innovative Natural Resource Solutions, said he sees commercial biofuel production as a matter of when, not if.
“It’s clearly doable, and it’s the sort of thing that at some point will scale,” Kingsley said. “The question is, are we at that point?”
Competition with oil poses one of the toughest challenges for the commercial success of any biofuel operation. Finding markets for byproducts could be key.
That’s part of Stored Solar LLC’s plan. The East Millinocket biorefinery is a “centerpiece.”
In a promotional video for its plan to build bioenergy parks around some of the state’s defunct biomass generators, Stored Solar said it hopes to “[make] use of the whole tree, tapping into the greater value of diversified biomass products.” It plans to sell its waste heat and use charred wood byproduct to fuel biomass electricity generators.
Bill Strauss, chief economist for the Biomass Thermal Energy Council and Maine Pellet Fuels Association, said liquid biofuels “definitely can work at the lab scale, but the critical questions are how much does it cost, how reliable is it and what are some of the byproducts.”
Increasingly, he said, pulp mills in Europe are turning to making higher-value chemicals rather than biofuel. Strauss said making a business of selling waste heat requires the right customer.
“The problem is that you need a heat customer that is 24/7, 365 days a year to make it work,” Strauss said.
Stored Solar also has a role in the Maine Born Global Challenge, an effort led by the Synthesis Venture Partners Fund to bring other companies and technologies into its bioenergy operations. The challenge was scheduled to announce its partners last week during a conference in Washington, D.C., according to the Portland Press Herald.
Kimberly Samaha, CEO of Synthesis and wife of a partner in the East Millinocket project and biomass generators in West Enfield and Jonesboro, did not respond to a request Thursday for comment on the challenge participants.
Economics aside, Wheeler said he’d be excited for any new technology to take root in Maine, providing new research opportunities to students and new employment opportunities for graduates trained for the chemical industry.
State of the art
EMEP wants to use a technology in development by Shell Oil subsidiary CRI Catalyst Co. to generate fuel and certain useful byproducts, according to a portion of its application for a U.S. Department of Energy loan guarantee.
The technology — get ready for it — is called integrated hydropyrolysis and hydroconversion, or IH2.
EMEP’s project proposes an IH2 plant of unprecedented scale. In an October presentation to the Commercial Aviation Alternative Fuels Initiative, a demonstration project is scheduled to begin operations in Bangalore, India, in April, making about 528 gallons per day.
The project outlined by EMEP calls for 174 times that amount, or 92,000 gallons per day.
Specific details for EMEP’s East Millinocket plan surfaced last week because of a lawsuit the company filed in an effort to buy the shuttered mill and on-site biomass boiler for $1.75 million.
In court documents, EMEP leader Bill Harrington wrote the company’s “initiative to acquire, upgrade and operate biomass plants throughout the state of Maine” would cost about $240 million.
While the lawsuit unveiled more details about the company’s big plan than previously disclosed, it’s also the reason Harrington and other leaders of the project have declined to comment more on the plan.
It leaves the question of cost up to past studies, which suggest that $240 million for a biorefinery and multiple biomass plants around the state would be a steal.
A 2010 study by the National Renewable Energy Laboratory estimated a first-of-its-kind plant — with double the capacity proposed for East Millinocket — would cost about $911 million alone. Even after refining the engineering, manufacturing and other aspects of the business, a 2013 economic analysis of IH2 technology by researchers at NREL and the Gas Technology Institute (where the technology was developed) put the cost of such a plant at $263 million.
EMEP said it hopes to fund about 30 percent of the project with private investment and about 70 percent of the project with a loan backstopped by the U.S. Department of Energy. And it plans to leverage the biomass plants it reopened in West Enfield and Jonesboro with the help of $6.7 million in taxpayer funds, over two years.
Kingsley, the consultant, said government help is often necessary to develop new technologies and that leveraging existing resources such as the two biomass plants are common in developing larger projects.
“I would say that skepticism is appropriate, but the other side of the coin is that any developer of any project anywhere — and I’ve been involved in hundreds — they take whatever modest advantages they have,” Kingsley said. “What they’re doing is project development 101.”
Compared with other processes for getting liquid fuels from wood waste, Wheeler said IH2 is unique and more sophisticated than the standard way of making bio-oil.
The IH2 process builds on other biofuel methods that involve quickly heating biomass, in the absence of air, to create a vapor. The vapor gets condensed into bio-oil. The oil has to go through further refinement.
In a recent paper, Wheeler found the first step of the IH2 process left a higher-quality fuel than other methods of quickly heating biomass to extract oil. The paper, which set out a way to compare different biofuel processes in a graph, did not address questions of cost.
In general, the various biofuel production methods rearrange atoms in wood waste, removing oxygen from the mix to get liquid mixtures of hydrogen and carbon, as in gasoline or diesel fuel.
By comparison, fossil fuels have very little oxygen to start, Wheeler said, making it easier to extract from them energy-rich and combustible hydrocarbons. And that’s the competition.
For biofuel production, the problem boils down to removing the oxygen from the mix as efficiently as possible. It also requires adding hydrogen back into the mix. There, Wheeler said, the IH2 process has an advantage.
The system isolates enough hydrogen to feed back into the first step of the process. It doesn’t need to import natural gas. For a site like East Millinocket, which does not have access to a gas pipeline, that’s a particular virtue.
Beyond the laboratory, the analysis can get a little more complex.
Wheeler said he hopes his department at the university can continue to help kick the tires on different bio-based project proposals to come.
“We have made ourselves available to help do due diligence on some of these projects,” Wheeler said. “There’s a number of other technologies that people are considering trying to locate here in the state.”