ENERGY-US: Paper Mill is Reborn, Sans Fossil Fuels

• by Violet Snow* - IPS/IFEJ (park falls, wisconsin)
• Sunday, November 29, 2009
• Inter Press Service

In timber-rich Wisconsin, paper mills have been a major industry since the 1800s. Small mills, suffering from the recession and high energy costs, are now shutting down, creating economic devastation for towns like Park Falls, where the mill provided jobs for 310 people in a town of about 3,000.

When William 'Butch' Johnson bought the bankrupt mill in 2006, he realised that to make Flambeau River Papers viable, he had to reduce energy costs. Plans for fueling the plant with biomass - mostly mill residues and woody debris left behind after timber harvesting - qualified the business for two million dollars in low-interest government loans and two million dollars in grants to resupply the mill and make repairs for start-up.

Except for a high-interest four-million-dollar loan from a venture capital group, he could not get a commercial loan.

'We're looking at a seven- to eight-year payback,' Johnson said. 'Most investors want three to five years. Being a good Republican, I had to justify how I'm going to sit there and go against my principles and take loans from the state. But the University of Wisconsin at Duluth did an economic impact study that showed it would be a good thing to do. It put people to work.'

Johnson spent six years of his childhood living in Park Falls, where his father owned a fishing rod company. He knew many of the people working at the mill, which was built in 1894. (One of plant's three paper machines running today dates from 1895.)

In recent years, the Johnson family's timber company has supplied pulp to the paper mill, so he also had a financial interest in the survival of the mill.

The mill's old boiler did not require conversion to switch from coal to biomass, but many technical details had to be resolved. An important step turned out to be stockpiling woody materials so they could air-dry from April through October before processing into fuel pellets, thus saving energy that would have been required to extract moisture.

With 500 tonnes of biomass per day running the boiler, the plant no longer uses fossil fuel in summer. In cold weather, the need to heat buildings has prompted supplementation from the old stockpile of coal, which was used up as of October 2009.

Currently low natural gas prices dictate its use in moderation for winter heating. The mill is on schedule to be completely fossil-fuel-free by 2012. Annual carbon dioxide emissions have been cut by an estimated 92,000 tonnes, or 30 percent, according to stack tests and calculations based on Wisconsin Department of Energy (DOE) and Environmental Protection Agency data.

Key to rejuvenating the business was Johnson's treatment of the employees, who were out of work for six months when the mill closed. He hired them all back without cutting wages or benefits and asked them to help him improve efficiency and cut costs.

'I didn't know a darn thing about making paper,' Johnson admits. 'I dealt with the union, and they promised me they'd make the paper.'

Between improvements recommended by employees and the conversion to biomass, the mill is saving 10 million dollars per year in fuel costs. Johnson expects to cut another 3.5 to 4.0 million dollars over the next three years.

Startup was challenging. Johnson says, 'The first year we lost a lotta dough - 12 million dollars. Last year we lost a little bit — two million dollars. This year we'll make about two million dollars. We're all pulling the wagon forward.'

The next step is the construction of a biorefinery that will use the second-generation Fischer-Tropsch (F-T 2) process to convert 1,000 tonnes per day of woody biomass, from sources currently used to fuel the mill's boiler, into green diesel fuel and green wax.

The diesel will be sold as a blending agent for trucking and aviation fuel. Green wax can be used to waterproof cardboard or manufacture candles, replacing waxes that are now imported or manufactured from fossil fuel sources.

Heat given off by the F-T 2 process will provide all the electricity, steam, and hot water needed to run the paper mill. A standalone refinery would require sending the excess heat through cooling towers into the atmosphere or pouring it into the river. Instead, diverting heat output into paper production will increase thermal efficiency of the refinery from 47 percent to about 70 percent.

Carbon released from the biomass will be captured and sold to a factory nearby that makes calcium carbonate, a limestone-derived product used as coating on Flambeau's paper, making the paper, in effect, a carbon sink.

Flambeau River Biofuels has sponsored a pilot project at Southern Research Institute in North Carolina to test the biorefinery process intended for use in Park Falls.

'We need 270 million dollars to build the biorefinery,' says Johnson. 'We're working with the USDA [U.S. Department of Agriculture] and the DOE on loan guarantees. It's a new technology, so there's a risk factor. The average investor won't put money in, but if a portion is guaranteed by the government, we feel confident we'll be able to attract investors.'

Construction of the five-story, two-square-block refinery is scheduled to begin in 2012, and the plant will be fully operational in 2013.

Johnson is proud that his business is blazing a trail of sustainability for the industry. He comments, 'We think we can become the poster child here for what you can do in taking an old mill and competing in tough times and doing it the right way.'

*This story is part of a series of features on sustainable development by IPS and IFEJ - International Federation of Environmental Journalists­ for Communicators for Sustainable Development (www.complusalliance.org).

© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service

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